Supply chains operating in these extraordinary pandemic conditions need to prepare for short and medium term ‘unknowns’ while building reliance to weather on-going issues, say global consultants, McKinsey & Company.
They suggest these six fixes to manufacturing companies:
- Create transparency on multi-tier supply chains, establishing a list of critical components, determining the origin of supply and identifying alternative sources.
- Estimate available inventory along the value chain—including spare parts and after-sales stock—for use as a bridge to keep production running and enable delivery to customers.
- Assess realistic final-customer demand and respond to (or, where possible, contain) shortage-buying behavior of customers.
- Optimize production and distribution capacity to ensure employee safety.
- Identify and secure logistics capacity, estimating capacity and accelerating, where possible, and being flexible on transportation mode, when required.
- Manage cash and net working capital by running stress tests to understand where supply-chain issues will start to cause a financial impact.
Read the full article on McKinsey & Company’s website here
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