As many states in the U.S. and countries around the world began to prepare for relaxing coronavirus-related restrictions, supply chain managers continued to grapple with the reality that they will feel the impact of the pandemic for many months to come.

How long? In an interview with the Association For Supply Chain Management on the impact of the coronavirus outbreak, veteran supply chain manager Gregory L. Schlegel, founder of the Supply Chain Risk Management Consortium, said businesses he works with are telling him the impact “from beginning to end could be anywhere from 20 to 30 weeks in duration.”

He called the coronavirus outbreak a “black swan risk event.”

In that same interview, Jim Kilpatrick, operations leader of Global Supply Chain & Network Operations at Deloitte Consulting, said of the impact on the supply chain: “It’s going to be broad. This is probably one of the first crises that has impacted so many different industries and supply chains at once. I think what we are going to see it have a rolling impact that will last for a while.”

Benefits of Lean Approach

Those who apply Lean and/or Six Sigma principles to managing supply chains and logistics are likely already reaping benefits. Part of the approach of Lean is to increase supply chain flexibility, something that is required right now for many supply chain managers.

As noted by Villanova University on the issue of Lean Six Sigma and supply chain, optimum supply chain performance “requires a quick response to changes in supply and demand through the ups and downs of business cycles, as well as during crises.”

Part of that is building in Critical to Quality components in the supply chain that ensure the operation is tailored to customers’ needs. This inherently makes supply chains more flexible, something that will benefit them in the current crisis.

Addressing the impact of the coronavirus on supply chain, Dave Brunt, CEO, Lean Enterprise Academy, wrote that organizations would do well to make structural changes during the crisis.

For example, he suggested shipping popular items (such as toilet paper) in smaller batches more frequently. He also wrote that organizations should map out the entire supply chain operation to understand “both the information flows and the physical flows. The consequences of actions on one point in the system for the other points in the system will then be clearly revealed.”

Short-Term and Long-Term Impacts

In the short-term, Schlegel said that supply chain managers should do the following:

  • Ensure safety of staff and partners by following CDC coronavirus guidelines – something he said companies should “over-communicate” across the entire supply chain
  • Identify critical materials and creates accurate estimates on how long will it take before a company runs out of needed materials and parts
  • Identify key suppliers, stay in contact hourly
  • Attempt to secure alternative supply and logistics but understand that “you will pay a premium.”

Some are already contemplating the long-term impacts of the pandemic on supply chain management. Dr. William Putsis, president and CEO of Chestnut Hill Associates and founder of CADEO Economics, wrote that supply chain managers will need to reconsider how they approach Just-in-Time manufacturing, a Lean strategy that is incredibly efficient during normal operations but that can get disrupted significantly during a crisis.

He said the crisis is bolstering the argument for using Internet of Things technology and cloud-based interconnectivity “led by automated robotics, AI, additive manufacturing (3D printing) and interconnected devices.”

“In the end, after the current crisis has passed,” he wrote, “the winners will be global growth and companies that have used this time to disrupt themselves.”