Only a little could be measured on how a world pandemic would impact business practices. Business operations that have been iterated over the ages, theorized and set in a hall of fame are now being questioned to address solutions.
The production and supply chain strategies that have been critically improved over time to reduce overheads is now left open and vulnerable to disruption brought about by Covid-19. With temporary caps laid on trade practices, firms everywhere are now searching for local answers to products that were acquired globally.
In addition, pricing strategies that have been achieved through supply chain has become a non-negotiable to the consumer. The customer shows little interest on paying the overhead to meet their needs. Organizations are now sprinting to assess their vulnerabilities to quickly work on answer within their local markets.
To quote an example, automobile organizations do not go into manufacturing many components that are found within the end product.
Touchscreens, audio interfaces electronic parts, bearings and magnets are procured from a global market. An organization resources parts needed in the manufacturing line.
Organizations now need to strategize a more diverse range of suppliers to keep their customers engaged. They would need to address the risks that are involved with acquiring new components that have quick turnaround time, and lower margins of error.
Meet new Suppliers
The first course of action of course that an organization would need to focus on would be to work around acquisition of products from a new region. This would be accounted in conjunction with quality of the product that would be delivered to the manufacturer. The trade war that has been seen between the United States and China has prompted many organization to move towards a new strategy of “Organization Plus One” where the main supply line is acquired from one location while a reserve could be procured from another global route.
Supply chain management is often a value that is associated with addressing an effective pricing strategy. Operation Managers can consider lower labor intensive operations and a regional manufacturing unit to bring a more viable operating cost. Quality control practices ensure that the production replicates all mandated quality norms within a local region.
Increase safety stock
If an organization fails to address a secondary acquisition a quick stockpile may be created for a temporary period. An organization would need to determine on the parts that would require a stockpile and those that may turn obsolete over a period of time. This opposes the novel idea of just-in-time or even lean production practices.
The last means of reducing the supply chain turnaround time can be to reduce a large variety of customized or localized product that would be available for a particular brand. The acclimatization of a product to different geographic regions or even retailers is a luxury that is best avoided.
Acquiring a new supply line, developing new methods of production, procurement or inventory management may not be an easy path for a tried and tested organization. Innovation, automation and new technological practices may be other adoptive measures that leads towards a path of survival.
The pandemic has exposed new challenges and caused organizations to revisit their operations within supply chain management. There is a new set of operations that needs to be laid to create a more robust business practices in the midst of the disruption. Exposure to new weaknesses has now allowed an evolution of new practices and further advanced vision over existing business