Five Tips for Being Prepared for Supply Chain Disruption
One of the biggest fallouts of the COVID-19 pandemic is the corresponding disruption to the global supply chain. According to PMI’s Global Megatrends 2022 report, the pandemic exposed long-standing supply chain vulnerabilities — particularly overreliance on single-source vendors and suppliers — that ultimately “decimated port and shipping capacity, pushed transport costs to new highs, created massive shortages of goods and components, raised consumer prices and increased inflation.”
For project leaders across industries, this has caused significant delays and cost overruns that will continue to impact projects down the line. It has also placed significant urgency on ensuring that organizations are better prepared for future supply chain disruption — whether due to global events or more localized interruptions.
These tips from project managers can help minimize supply chain risks.
1. Be prepared to reprioritize. When major a disruption hits supply chains, project leaders must be willing to set aside current projects to focus on critical gaps. Such was the case for Laura Cocuzzi, PMP, manager, enterprise resource planning (ERP), Region of Peel, Ontario, and board vice chair, Supply Chain Management Association Ontario. When the pandemic hit, Cocuzzi and her team were planning for a new ERP system implementation. When the supply chain disruption began, however, the team had to pause that project to support their community.
“We have to first and foremost be there to provide services to our residents,” she said. “When we are in emergency management mode, we are focused on the fundamental services that need to continue during an emergency, such as ensuring paramedic support and critical personal protective equipment are available. We are dealing with the priorities of life and death.”
“As an organization, we look at the business criticality of things. We need to ensure that our systems can fully function. We need to make sure people are getting paid. We go through the list and looking at things in terms of what may be less critical. If there are internal matters that we need to deal with, perhaps they might be reprioritized. We may also need to repurpose some of the staff to help support some of the critical community service needs and projects.”
2. Note the fragile points. Cocuzzi recommends project teams take the time to learn from the supply chain disruption by documenting the weakest links in their supply chain.
“We are still in recovery mode right now, but it’s a good time to analyze where the most fragile points are within your supply chain and within your commodities,” she said. “Then spend time planning to ensure that you always have contingencies for those specific fragile points in place. That may mean building relationships with additional vendors who can help when an interruption occurs, for example.
“You also need to assess whether you are building and transferring unreasonable demands and risks to your vendors,” she said. “In this climate, many vendors are finding it difficult to hold pricing long term and honor contract obligations leading to vendors walking away or major interruptions.”
As part of this lessons learned process, engage the people on your team or your project, including stakeholders and even suppliers themselves, to get a full perspective on weak spots and identify potential solutions.
3. Be prepared for exits. In the wake of the pandemic, there is a growing talent shortage as employees around the world leave the workforce or change positions to make more money or pursue new opportunities. The same is true for supply chain professionals. According to research conducted by Hays Research Group, 59% of professionals working in supply chain and logistics in the United Kingdom and 77% in the United States said they plan to change roles this year.
“We are seeing people leaving their positions because burnout in supply chain management is massive,” said Cocuzzi. “People are just not at that same level of focus and attention, so to speak. This means there is a major disruption happening on the resource end. It is imperative that an organization invest in succession planning and make sure the people that do remain can transfer their knowledge to new people as they come in. This is a must. When it concerns projects, ensuring you have people who will be continuing with the organization is crucial.”
4. Investigate technology options. The global supply chain disruption exposed some serious technological shortfalls in organizations around the world.
“Now we're starting to see this real push — in my case with the ERP implementation, for example — to make sure that companies are working with the best-in-class technology possible and as much automation where we can, as opposed to a lot of the manual workarounds,” said Cocuzzi.
For Karina Addari, Ph.D., PMP, this push for technological advancement increased dramatically during the pandemic. At the time, Addari worked in supply chain management for the tax preparation company H&R Block. There, she was responsible for ensuring the company's 333,000 offices had the necessary resources—including legal forms and reference books—before “tax season” started in the United States.
“My area was mainly printing, and we experienced a considerable increase in the pricing for printing during the pandemic,” she said. “So, we needed to think outside the box to overcome this challenge.”
Technology was to be the answer. Addari found a supplier that developed a platform to deliver all content electronically, resulting in significant savings in both budget and resources.
“From the 187 titles that we used to print, we reduced that to 67. And by the time that I left the company, there were only 37 items printed,” said Addari, now the senior manager for operations management at Hostess Brands in Lenexa, Kansas.
Despite this push, tech adoption in supply chain management still varies among organizations.
5. Understand risk tolerance. Not only should supply chain delays be added to this risk tolerance, but so should tolerance for the human factor, said Jamie Suriano, PMP, senior director, Alpine Supply Chain Solutions, Simpsonville, South Carolina.
“What is your tolerance for a key player getting sick and what is your backup plan?” she said. “Are you ok with not having a backup and just saying, ‘OK, we’ll wait for you?’ If your company is intolerant of that, then you’ve got to have a B plan and a C plan.”
To get a better grasp on the human factor, especially when working globally, companies need a constant awareness of potential events or disruptors in a specific country or region, according to Suriano.
While Suriano believes companies are becoming more open to this human factor, she also believes a certain amount of fatigue is setting in.
She said that when it comes to the state of the supply chain, there may be no opportunity to “get back to normal.” Instead, companies will have to continue making adjustments in order to thrive.
“The companies that tried to go back to what normal was pre-pandemic are not going to survive long term,” said Suriano.