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. 

Three Strategies to Keep Remote Workers Engaged

Has your team recently moved to working virtually? Could you use help ensuring they are engaged?

Per Gallup, the first half of April finds that 62% of U.S. workers have worked from home because of concern about the coronavirus.

Of those new to working virtually, a new survey from Society of Human Resource Management (SHRM) says that more than 7 out of 10 employers, or 71 percent, reported that they are struggling to adapt to remote work.

Remote work is not new, even though many companies are leveraging it for the first time due to the pandemic.

Gallup provides three strategies summarized below known to work with virtual teams.

  1. Communication yields engagement. Scholars and practitioners have been telling remote managers the same thing since employees went remote in early March: communicate. It's good advice, but it's missing an important piece: frequency. Gallup research finds that frequent conversations yield the biggest improvements in engagement. And remote workers are three times more likely to be engaged if they receive feedback from their manager at least a few times per month. So, communicate -- ask what their preference is. Don't make it a guessing game, make it a conversation.

  2. Accountability comes from expectations. Remote or not, employees can only be accountable for what's expected of them. And to hold remote workers accountable, managers must provide clear and collaborative expectations -- but 26% of employees strongly agree their manager is good at helping them clarify priorities, and six in 10 employees know what is expected of them at work.

  3. Individualize to optimize. Managers should identify the conditions that allow individual people to do what they do best to set them up to succeed at home. That could mean a daily team video conference so socially motivated workers can see the rest of the team as they work. Or managers can set up an opt-in reminder system: "It's 8 a.m. and time to do great things!" and, "10 a.m. and time for a break," And, "It's 4 p.m. -- what's left on your to-do list?" Some employees don't need or want that level of attention -- they'll find it intrusive -- but others do. As a manager you need to study your team, ask what they need and provide individual support to optimize performance.

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.

If you found these insights useful on managing remote teams, consider signing up for our new VIRTUAL Workshop next week Tuesday (5/5), Employee Engagement Tactics for Remote Workers. Participants will learn strategies and skills that managers can use to foster greater engagement among their employees who, perhaps for the first time, are working remotely. Teri Giannetti, MBA, has extensive experience leading teams and working remotely. As the Founder of "It's All About the How Consulting," she will share practical insights on how you can manage and lead remote workers during this unique moment in time.  

Part 3 - Coronavirus Task Force Supply Chain Improvement and Best Practices

Guest Author: Greg Studer, CSCP

Part 3: Supply Chain Improvement and Best Practices

While watching the Coronavirus Task Force daily briefings I saw the correlation to supply chain management principles in action found within the APICS Certified Supply Chain Professional (CSCP) material.   

In this three-part series, I’ve outlined applicable CSCP modules that apply to the actions taken by President Trump’s Coronavirus Task Force including aligning with business strategy, components of demand and supply chain improvement and best practices.

In part one, we reviewed the alignment with business strategy and how the task force reviewed the overall strategy and objectives of their efforts. In part two, we looked at the components of demand and how the Task Force applied supply chain management principles to forecasting, prioritizing scheduling and constraints.

In this last part three, we will look at tools the Task Force leveraged for supply chain improvement and share best practices.

Module 3

Measurements

The basic measurements we see in terms of the pandemic are total confirmed cases and deaths in an area. These are the bar graphs we see on the television. I would like to see additional information like how many people have been cured and tested. 

Performance metrics can be used to measure different activities. How are we doing with supplying resources to states, counties, cities, and hospitals?  What are delivery times to replenish stock? What is the time to fill states' request for supplies? 

Additional tools to measure and identify opportunities for improvement in the supply chain include:

  • A Fishbone diagram, tool to identify root cause, can be used to address why there are shortages of supplies.

  • Control charts, a tool to help understand if processes meet customer requirements, can be used to measure stockpiles levels.

  • Benchmarking is useful to compare different countries, states, hospitals, etc. to each other and for setting goals.

Improvements

Once you measure and identify opportunities to improve the supply chain, you make necessary corrections and improvements. We’ve already seen this continuously through this pandemic over the past 4 months. After this is over there will be time to see what was done right and what was done wrong and what will need to be improved.  Some questions to consider in the process will be:

Nationally

  • Were proper personal identified ahead of time and during the Pandemic?

  • Are computer systems capable of communicating properly between National and all States?

  • Did National have proper material levels in stockpiles?

States

  • Were States Emergency Management teams prepared for a pandemic?

  • Did States and Cities Emergency Management teams have proper Stockpiles of medical material?

  • Did States and Cities know who to contact and communicate back and forth successfully?

Hospitals

  • Were Hospitals sharing information with each other? (Private and Public Hospitals)

  • Did Hospitals have a contingency plan for a pandemic?

Risk

Everyone takes risks. Everyone has different levels of risk. Some people live on the edge and do high adventure activities like sky diving and hang gliding and others are happy sitting around a fire in the backyard. This is no different for business and Supply Chain.

What risks are there with stockpiling ventilators?  

  • How much do ventilators cost and what is the holding cost for an extended period of time?

  • What is the shelf life of a ventilator being stored?

  • Does a ventilator need to recertified after an extended period of time?

  • What parts need to be placed after a period of time?

  • Will parts be obsolete when needed?

What risk will we tolerate with reopening businesses?

  • Testing temperatures as you enter a business or work.

  • Kiosk’s that take your temperature as you sign into work.

  • Spread out seating at concerts and sporting events

  • Spread out seating at church services.

Conclusion

In this three-part series, we covered a few things that need to be implemented to have an effective supply chain. The Certified Supply Chain Professional course covers 45 chapters of supply chain information. Supply Chain is a fast expanding career field that covers raw material to suppliers and vendors, then to customers and can return back in a reverse supply chain. It is a vast field of study.

When this pandemic is over and time passes, more information will be available for what will be a great case study in supply chain and what should be corrected for the next one.

One last thought, the human race over time tends to relax and let things go to the wayside. It is human nature to forget about horrible things and move on. Hopefully, in this case, we’ll take the time to assess, improve and prepare as much as possible for the next pandemic.

Part 2 - Coronavirus Task Force and Components of Demand

Photo: New York City aerial view. 

This is part two of a three-part series written by guest author Greg Studer, CSCP, CPIM. Greg is an experienced supply chain professional in the Milwaukee area who recently earned his APICS CSCP certification. 

Part 2: Components of Demand

While watching the Coronavirus Task Force daily briefings I saw the correlation to supply chain management principles in action found within the APICS Certified Supply Chain Professional (CSCP) material.  

In this three part series, I’ve outlined applicable CSCP modules that apply to the actions taken by President Trump’s Coronavirus Task Force including aligning with business strategy, components of demand and supply chain improvement and best practices.

In part one, we reviewed the alignment with business strategy and how the task force reviewed the overall strategy and objectives of their efforts.

In part two below, we will look at the components of demand and how the Task Force applied supply chain management principles to forecasting, prioritizing scheduling and constraints.

Components of Demand (Found in CSCP Module 2)

  1. Planning Demand. This is your overall plan for demand.  It is not just looking at forecasting but looking at what is in stock, considering suppliers as to what can be produced and at what rate.
  2. Communicating Demand. What supplies are needed and where? Communication needs to be simple and clear. All 50 States needed to know which personnel to talk with nationally and vice versa.  Each State was looking to protect their own supplies. Priorities needed to be set to distribute supplies with regards to the Virus spread.  Questions considered were: Who needed supplies immediately? Who had an overage of supplies? Communication was complex including National, State, City, hospitals and other organizations. Everyone needed to be communicating in all directions.

Forecasting Demand

  1. Forecasting. The Task Force used several different models to try to anticipate the spread of the virus. If anyone has ever tried to use forecasting models you know it is a tool to try to determine what will happen, to help plan and look for trends. This might be easier to explain if you are watching a weatherman trying to tell you where a hurricane is going to land. The further out you are looking at different forecast models, the broader the projected path of the hurricane will be projected.  The closer you look at forecasted models, the smaller the projected path becomes. Then there is always an added chance that another weather disturbance is happening and what you might expect to occur is totally different.    Not an easy task with so many variables.
  2. Managing Change. This virus and any virus is unpredictable and can change. Some things that can affect how a virus reacts are things like differences in cultures, how people live, interact, where they get their food, what food they eat, living environments, health care strengths, and the age of the country.  These were some of the data elements that the Task Force was analyzing and plotting to see what could occur in the United States.
  3. Models, Forecasts, Graphs, Charts, and Surveys. These are all tools that can be used to project outcomes. These all can be skewed by using bad data, wrong indicators plotted, and survey questions that do not address the subject matter. These skews can be intentional or unintentional. We are starting to see debates if the models that the task force is using are the right models.  The model may have had too much data from the initial start of the epidemic and is now being corrected.  After three months we are still finding new things about the virus. There is also a debate that the virus may have started way before December 2019 and was in the United States long before the alarm was set off.  This can affect the model.

Demand Prioritizing

We currently live in a world where we all get on our phones, see something on a webpage and order it. We then expect it to be on our doorsteps the next day or two. We are satisfied with the push of a button. We are not used to being told that there is a delay.

This virus caught pretty much everyone off guard. With the entire planet wanting the same medical and protective items, ordering was no longer as easy as the push of a button.  

Just looking at a map of the Coronavirus for the United States you can see how widely the virus has hit. This map can help to determine where supplies are needed. Cities with subways and skyscrapers and tall apartment buildings have large breakouts. Cities that had large events like the Super Bowl and Mardi Gras have high breakouts. We still do not know if the weather has an effect on the virus and will it act like normal influenza and go away and come back next fall.

All these factors are being looked at by the Coronavirus task force team to determine where supplies need to be delivered. President Trump has told States that he will work on getting supplies but they also need to secure supplies for their State if they can find them. This will save lead time and material will be delivered where it needs to go faster. 

The American manufacturing spirit has stepped up and has asked how they can help. Mask, face shields, ventilators, hand sanitizer, and many other items are being made by manufacturers who never made these items before. This is helping to replenish the needed supplies and in the near future help to supply other counties with needed supplies.

Master Scheduling

The Task Force was trying to do three things.

  1. They asked states to tell them what they needed to fight COVID-19 and where they needed supplies.
  2. Then they asked Manufacturers of supplies what they had on hand and what they can produce in the future.
  3. Finally, they asked non-manufactures to step up to the plate and determine if their facilities could be retooled to make needed supplies.
    • Everyone needs to communicate with each other. If a city finds necessary supplies they need they need to communicate that across the supply chain network. 
    • There are states sending unused ventilators and supplies to states that need them.

Constraints

There were not only constraints on supplies but also on logistics, warehouses, and transportation. This deals with the supply side and demand side.

On the supply side, you need to know who makes what product. Who makes the material to make those Products? Each supplier and its supplier have different manufacturing locations, warehouse locations, and have outsourcing that may have to be done. Then you also need to look at packaging along with other Supply issues.

On the Demand side, you have warehouses for national, state, city and hospitals. They needed to consider which warehouse needs what first and how should it be shipped. Should it go to a central location or be shipped direct?

These are just a few general things that need to be thought out to have a successful supply chain.  Mistakes will be made because we are human. Strong communication is critical to having an effective Supply Chain.

In the third and final part of this series, we will examine how the efforts of the Task Force correlate to the CSCP module three, Supply Chain Improvement and Best Practices.

 

Coronavirus Task Force Applying Supply Chain Management Principles – 3 Part Series

Photo source: https://www.coronavirus.gov/

APICS Milwaukee is excited to share this three-part series written by Greg Studer, CSCP, CPIM. Greg is an experienced supply chain professional in the Milwaukee area who recently earned his APICS CSCP certification. 

Part 1 - Coronavirus Task Force aligns supply chain needs with the overall strategy. 

While watching the Coronavirus Task Force daily briefings I cannot help but see the correlation to supply chain management principles found within the APICS Certified Supply Chain Professional (CSCP) material.  

In this three-part series, I’ve outlined applicable CSCP modules that apply to the actions taken by President Trump’s Coronavirus Task Force including aligning with business strategy, components of demand and supply chain improvement and best practices.

In part one, we will review the alignment with business strategy and how the task force has reviewed the overall strategy and objectives of their efforts.

Per the CSCP training module 1, the first step in supply chain management is to align with business strategy.

Step 1: Coronavirus Task Force reviews the overall strategy and objectives with the below actions.

  1. Slow down the spread of the Coronavirus. Each state Governor has the ability to enforce rules and Guidelines in their state and monitor the spread of the virus and report their findings back to the National Government.
  2. Each State was been asked to review their capabilities and what are their Supply levels are and what level are those supplies. High, Medium, Low, Critical.
  3. Each State, City, Township has its own Emergency Management Division.
  4. Identification of the National, State, Counties, City, and Hospital conditions and needs.
  5. Identify what manufacturers are capable of making needed Supplies in the USA and what supplies are only made outside of the USA.
  6. Keep a watch on the Global Risk. Gather as much information from other nations as possible, use that information to set up and review strategies and make adjustments where needed.

Step 2: Creating supply chain strategies.

  1. What supplies do states have a problem procuring? Task Force asked governors what they needed and told them the government will work on getting the supplies but in the meantime, they should also work at looking at getting supplies themselves in order to cut out the lead time and find closer sources.
  2. Communicating downstream. Review what each state, county, city, hospital has in stock and see if the material can be moved around to help those in need. Partnering with states, cities and hospitals to open the lines of communication.
  3. Partner with the states. How well is each State Emergency Management Division setup and are they prepared to put things into motion?
  4. Partnering with Manufacturers. Communicating upstream. What are the capacities of current manufacturers for medical supplies? The Task Force stepped in and told US suppliers that they must first fill the needs of the US. Requesting all manufactures in the US review if they could adjust their facilities to make supplies that are in need such as masks, gowns, ventilators, etc.

Step 3: The President’s Coronavirus Task Force has a large resource of knowledge.

  1. Vice President Pence is in charge of gathering up information and helping direct information flow. This is needed because of the vast size of this project and he is second in command and can inform the President of any main issues. This keeps both leaders in the loop in case one or the other gets the virus.
  2. Team of experts is assembled to help make decisions. Dr. Deborah Birx, Dr. Anthony Fauci, Dr. Robert Redfield, Seema Verma to name a few.
  3. The Pentagon and the United States military are ready to help out when needed.
    • Two hospital ships
    • Army Engineers erecting hospitals where needed
    • National Guard to help where needed

Step 4: Closing borders and reviewing global data.

  1. Closing the China border was a key to slowing down the virus.
  2. Reviewing Italy and Japan characteristics based on data and news important considerations for spreading of the virus including age of populations, China’s connection to owning 200 companies in northern Italy, cultural differences and open markets.

These are just a few supply chain management considerations that the Coronavirus Task Force had to set up and execute in a very short time period.  With a global pandemic, there is an incredible amount of information to be gathered and analyzed.  Some of the data early on was false or inconclusive. This is an extreme situation that is constantly changing with decisions made a month, week, day, or even hours ago needing to be changed and a new course taken.

In part two, we will look at the components of demand and how the Task Force applied supply chain management principles to forecasting, prioritizing, scheduling and constraints.