It is now clear that the impact of the pandemic is a long-lasting one. However, the most important question is how do we prepare ourselves for recovery and the new normal?
Predictions and implementations
The future may be unclear, but it has sets of economic predictions with a higher probability of V-shaped versus U-shaped recovery e a second or third stronger wave of covid-19 death ructions, etc. Supply chain management companies should prepare themselves for which every scenario is likely to become a reality. Regardless of the business plan, supply chain companies must consider alternative calculate costs and invest in a plan of action before the window of opportunity closes.
Normalize your demand history
The impacts of the virus have created an unpredicted situation, and what we will see in the coming months could be nowhere near what we expect. The first step for supply chain technology companies would be to normalize historical demand according to the baseline. To normalize, companies must consider accuracy, speed, and efficiency as the key deciders. The data used for safety stock calculations should accommodate wild swings and always meet customer service goals.
Develop an action plan
Working on an action plan based on the learnings from the various scenarios is important. Some of the ways to do that are to include each scenario's probability against one another pick the most probable range, and shoot for the most likely outcomes.
During normal times, companies tackled uncertainty in inventory management by placing buffer inventory against safety stocks. In the current situation, inventory planners must consider both typical and atypical uncertainties by using certain strategies. Some of these strategies include changing deployment rules to reflect inventory plants so the stock will support the strategy and modifying inventory strategies to a more coverage-based model.
Work on limited supply
It is crucial to reconsider the bottlenecks and constraints occurring in the supply chain. More than just evaluating the levels of uncertainty, it is important to manage and make better use of the available supply.
The most successful businesses are the ones that quickly adapt to changing times. It would be wise for businesses to keep adaptability as their key survival skill with turbulent times ahead.