Navigating crisis impacts on a logistics network
While it is still unclear what the second half of 2020 will be like, there are actions that businesses can take to manage an effective logistics network.
This past January, few of us could imagine how quickly things could change. Unlike crises of the past, in a matter of weeks, COVID-19 proved not only to be global in scope, but one that impacted businesses in every industry, especially supply chain and logistics teams responsible for delivering products to customers in states with varying levels of lockdown and ever-changing regulations. While it is still unclear what the second half of 2020 will be like, there are actions that businesses can take to manage an effective logistics network. These actions can be deployed, regardless of the situation whether a pandemic, weather or other events.
Establish a supply chain task force across the distribution and logistics network
One of the first things ABB did to assess any potential impacts was to establish a specific supply chain task force in addition to our standard crisis management team protocols. The task force included partners from across the organization, including Product Development, Sales, Marketing, Customer Service, IT, Finance, and Procurement. It was important to have these stakeholders as part of the process to continually assess the situation and the implications for any gaps we might experience or foresee. One of the things we found helpful was to be involved in the conversations early on, not just at the end after other key decisions had been made.
Create a command center within the logistics team to manage and keep track of changes within your delivery footprint
Even with the supply chain task force, there will still be immediate, tactical plans and decisions that need to be made. Within the command center, consider a map of “hot spots” to stay ahead of trends. Keep a detailed inventory of Federal and state regulation updates. This was especially key in the early weeks of the pandemic as areas had varying degree of shutdowns. Also critical was maintaining a list of customer-site closures and emergency contact information for real-time notifications. It was important for both incoming materials as well as the delivery of finished goods. Since states may have restrictive areas – we continue to be prepared with other delivery options and back up suppliers of raw goods should typical sources cease operations. This is also to be deployed with weather-related crisis events.
Create an emergency backup plan to support customer shipments in case of plant/distribution center shutdown
It is critical to develop a plan to address customer shipments in case of a partial or complete shutdown of a plant or distribution center. Included in the contingency plan should be details for adjusted production schedules, alternate delivery plans and other changes relevant to vendors or suppliers. Communicate any new processes or delivery timelines to customers, vendors, suppliers and other stakeholders.
Communicate safety protocols to logistics service provider partners
As processes are updated or new protocols are implemented, communicate updated procedures to the teams involved. Temperature checks, breakroom protocol, enhanced check-in processes are just a few of the new or updated protocols we have implemented since COVID-19. Including details about the process, the rationale for the change and any other pertinent details will be critical to ensure teams comply with the protocols.
Implement a regular communication cadence with key internal and external partners about network changes
Keep a detailed inventory of Federal, state and local regulation updates, or disaster zones, and communicate key changes to your stakeholders. Consider distributing updates on the same day each week so teams know what to expect and when to expect it. In addition to a list of customer closures, maintain an emergency contact information list for real-time updates. Leverage multiple communication channels including email, text and phone.
Managing a logistics network during a global or regional crisis can be challenging. Leveraging other teams in your organization, preparing for multiple scenarios and communicating proactively and transparently can ease the stress and overcome the uncertainty of unprecedented times.