The Supply Chain Can’t Stop: Best Practices for Triaging Shortages

Buzzzz… it’s your supply chain calling and it wants OFF this crazy roller coaster caused by the COVID-19 pandemic. It wishes for the good-old-days when the crisis to be managed was a natural disaster like a flood, fire, or port closure. Because natural disasters have a finite end date and supply chain teams can manage recovery plans to that.

Even the 2015 Tianjin, China factory explosion that caused supply shock effects that were felt for almost a year seems like a tiny flea in the face of the scale of disruption caused by COVID-19. A recent Bloomberg article described it as the worst supply chain crisis outside wartime.

“The world’s supply chains are facing a root-to-branch shutdown unlike any seen in modern peacetime.” — Bloomberg

But the supply chain can’t stop. Our colleagues in the consumer packaged goods (CPG), food & beverage (F&B) and healthcare industries are required to continue operations at a breakneck pace despite extreme headwinds. Supply chain teams in other sectors are working around the clock to react as the initial supply shock has been exacerbated by a demand crisis in Europe, the U.S. and other major economies due to shelter-in-place and self-quarantine orders.. Add on the impact to production delays caused by shortages in raw materials, semi-finished materials, or packaging and anyone that makes goods, in any country around the globe, is looking at an endless sea of unplanned exceptions that need triaging. It’s every supply chain professionals nightmare.

Now, let’s explore the very common scenario many are dealing with: shortages of direct materials.

As a supply chain practitioner, your first instinct ingrained from old habits might be to start firing off emails or phone calls, especially as the Production Planner, Purchasing Analyst and others you need to reach to fully understand the impact of this delay are likely working from home.

The downside to utilizing emails, WhatsApp, Slack or Microsoft Teams to manage shortages at the scale of the COVID-19 crisis, is that it becomes unruly very quickly. There’s no way to track, prioritize, or manage in a systematic way. There’s also added delay to resolve issues at a time when speed is critically important.

The traditional way of managing shortages:

1. Start by playing phone tag with the supplier & their 3PL to find out what happened and can they expedite delivery. Take down notes, think about the information for a while to assess impact, then eventually share with some people (not all) that you think need to know.
2. Uh oh. The shipment is quarantined for at least a month at customs.
3. Wade through 3 systems and 2 spreadsheets to figure out there are 6 key work orders impacted. That delay is not going to work. Panic and look for alternatives.
4. Move to Plan B, which involves trying to find a local supplier — all while replying to the barrage of interruptions from others across the organization asking for the latest update
5. Sink under your couch cushions from the sheer chaos of it all. By the time you re-emerge, there is a new crisis du jour.

The improved way of managing shortages:

A how-to guide for managing direct material shortages

1. Get everyone in one virtual “war room”
2. Create an incident for each problem. Invite the right colleagues and partners.
3. Use the Incident List to track all problems across your operations. Clear list of problems. Clear owners. Clear action items.

Elementum is a cloud platform that was designed to help global organizations easily collaborate to track, manage and resolve supply chain exceptions. And in this time of global crisis we’re doing our part by inviting any and all supply chain organizations to use Elementum Essentials at no cost for the rest of this year. Our customer success team stands ready to set up a virtual war room for any organization that needs the extra help. It takes less than an hour to do so, does not impact your IT team, and we promise to have you up and running within 24 hours. Because #SupplyChainCantStop.

Finally, to all those unsung supply chain heroes out there, a heartfelt THANK YOU. We are here for you — ready to help.

Nader Mikhail
Founder and CEO | Elementum