Prepare for Supply Chain Recovery - Optimize Production and Distribution Capacity

Are you looking for actions you can take now to prepare your supply chain for COVID-19 recovery? 

Recently McKinsey & Company shared in their special Coronavirus collection, how you can prepare for supply chain recovery with the tactic of optimizing production and distribution capacity. We've summarized below their suggestions. 

Per McKinsey, after creating transparency with suppliers, estimating available inventory along the value chain and assessing realistic final-customer demand, the next step is to focus on production and distribution capacity. 

Optimize production and distribution capacity

"Armed with a demand forecast, the S&OP process should next optimize production and distribution capacity. Scenario analysis can be used to test different capacity and production scenarios to understand their financial and operational implications.

Optimizing production begins with ensuring employee safety. This includes sourcing and engaging with crisis-communication teams to communicate clearly with employees about infection-risk concerns and options for remote and home working.

The next step is to conduct scenario planning to project the financial and operational implications of a prolonged shutdown, assessing impact based on available capacity (including inventory already in the system). To plan on how to use available capacity, the S&OP process should determine which products offer the highest strategic value, considering the importance to health and human safety and the earnings potential, both today and during the future recovery.

The analysis will draw on a cross-functional team that includes marketing and sales, operations, and strategy staff, including individuals who can tailor updated macroeconomic forecasts to the expected impact on the business. Where possible, a digital, end-to-end S&OP platform can better match production and supply-chain planning with the expected demand in a variety of circumstances."

Taking steps now can help ensure your supply chain is ready for COVID-19 recovery. 

Another resource for you is a FREE webinar being hosted by TOCICO & ASCM scheduled for tomorrow (5/8) at 8:00 am CDT. They have put together an expert panel to offer significant forward-thinking insights on how the world’s supply chains have been significantly impacted by the COVID-19 pandemic. They will be sharing Best Practices: What to do and, as important, what NOT to do. The goal of their Webinar is HOW to restart global supply chains as soon as possible and make them stronger and more resilient in the future. This 2 Hour Webinar will conclude with a live Chat enabled Q&A session, including offering suggestions on next steps to get more information. Registration is FREE! Please help us to Spread the Word by inviting others to join this Webinar

At APICS Milwaukee we’ve been supporting supply chain professionals for over 40 years with the education and information they need to be successful in ever-changing times. We will continue to support our members and the community during the coronavirus pandemic.

Also, if you are looking for more information on sales and operation planning techniques, consider signing up for our FREE VIRTUAL Workshop next week Tuesday (5/12), Sales & Operations Planning introduction. Taught by Anthony Zampello (Z), ASCM S&OP Master Instructor, S&OP Consultant and Adjunct Instructor at Bentley University and Daniel A. Marino, Senior Partner of Marino,LLC. This two-hour session will first introduce you to the overall hierarchy that businesses run by.  It will show you where different levels of planning exist and how they differ even though they may have similar objectives at times. The first hour will concentrate on S&OP while the second will focus on Master Scheduling.