Supply Chain Priorities in Response To Covid-19

Supply Chain Priorities in Response to Covid-19

Covid-19 will pose one of the biggest corporate challenges in recent decades. But effective and rapid response can shape the recovery and beyond. This can help teams avoid getting worn out by the all round crisis and instead come out stronger drawing strength from each other and with greater conviction in the corporate purpose.

Many companies would have to drastically cut production & capacities either because of uncertainty of demand or supply constraints. Now more than ever Supply Chain and logistics have a crucial role to play to not only ensure near term survival but also bolster the long term health of the company.

The corona virus pandemic impact on Supply chain for Pharmaceutical industry, which has been one of the success stories in independent India, would be even more severe because of

  • Difficulty in forecasting accurately demand in the short and medium term
  • Depleted inventories of finished formulations both for chronic and acute conditions.
  • Very high (over 70%) dependence on imports for APIs & Intermediates, especially from China. 
  • High cost and long time required to switch source because of regulatory complexities.

To maintain top line and liquidity in the near term, Supply Chain team would need to

  • Mobilize rapid response team immediately to address supply vulnerabilities and monitor daily.
  • Maintain constant visibility of marketing demand, shifting public health priorities and changing customer needs with the onset of summer & monsoon months which is usually accompanied by a surge in infectious diseases.
  • Implement product/service allocation for constrained assets and/or supplies to mitigate immediate and medium term risks to business and suppliers and minimize complexity.
  • Actively communicate with marketing and plan adjustments in product offerings to preserve top line revenue, increase sales force effectiveness and retain customer loyalties.
  • Determine quickly new mitigation strategies like alternate sourcing, if feasible.
  • Ensure proper safety precautions in view of current environment on both inbound and outbound material movement.
  • Liaise with Government agencies for early import clearances of APIs and intermediates.

While many of these tasks are done routinely in regular course of business it is likely to be extremely challenging in the immediate aftermath of corona pandemic because of depleted financial and manpower resources , severe disruption in the supply chain pipeline,  imbalance  in market inventories in India & overseas and simultaneous effort by all divisions to regain lost ground. It would require careful balancing between servicing domestic market with demand from overseas markets to protect customer loyalties.

Critical difference between individual companies in their efforts for immediate survival and medium term success would depend largely on how well they are able to manage their people risks. It would need immediate identification & support of critical roles, contingency planning by identifying people who can replace one another quickly in case of unavoidable absenteeism, manage work force flexibility and decrease risk of exposure through creation of small teams and social distancing. HR would need to partner with supply chain to ensure there are no disruption or communication gaps.

Covid-19 has provided companies with an opportunity to set up digital working processes on a much larger scale than in the past. This might, however, require support in scaling up of infrastructure, training of employees in digital readiness; establish remote working and substantial investment in technology & skilled manpower through reallocation of available resources within a company.

Finally, all companies, irrespective of size should have a clear communication strategy to their teams to help them handle the enormous stress both at work place and home due to the Covid-19.

 Suingora Consulting LLP with its team of very experienced professionals can partner with individual companies to chalk out a plan and assist in monitoring and execution of such a plan.

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About the Author: Ranjan Chakravarti

Management Consultant and Practicing Executive live coach passionately committed to helping aspiring professionals maximize their professional and personal potential, focussed on developing leadership capabilities, team building, communication and time management skills. Working experience with senior managers in local and international companies and also with leaders in international NGOs.

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