While it’s hard to predict the timing and scope of an event like COVID-19, supply chains need to have the flexibility and foresight to prepare for the unexpected, and therefore prevent this type of large disruption from happening in the future. One way to ensure preparedness is to digitize supply chains with modeling and simulation technology so manufacturers can test real-world disruption scenarios that are otherwise impossible to imitate.
According to an April ISM Survey, COVID-19 has disrupted the supply chains of 95 percent of U.S. companies, and over 44 percent of these companies did not have a plan in place to manage such delays. This shows that companies still rely on legacy systems that lack the agility and optimization capabilities necessary to thwart the conditions of exceptional risks.
These legacy planning and scheduling solutions are simply outdated. With the majority requiring manual entry in spreadsheet programs, they are time-consuming, static, risk human error, non-collaborative and make it difficult to assign priority. All of these characteristics indicate an inability to adapt quickly, which is crucial when mitigating unexpected supply chain disruptions like a pandemic.
However, with the proper planning models, companies and their supply chains can be better prepared for a true crisis, and have better visibility into their regular operations across their network. For instance, by using modeling and simulation technology, businesses can simulate changes in labor availability or if the vendor supply is disrupted, and they can adjust raw material availabilities and determine how this affects the manufacturing process. Operators can simulate the crisis conditions of a sudden drop-off in demand and the steps required to return to “normal” while addressing pent-up demand. Or businesses can look at any number of day-to-day interactions with their supplier network, and can create more efficient plans that result in zero delays to work orders based on dynamic changes to multiple conditions.
While COVID-19 is the most serious economic crises we’ve had to manage in recent memory, it will not be the last unexpected crisis to occur. Businesses with cumbersome supply chain and logistics operations should see 2020 as the tipping-point to finally upgrade from static and manual tools to a dynamic digital platform that supports agile and adaptive planning processes. With these tools, organizations can model new scenarios and optimize the strongest, most efficient path forward.