The FloridaMakes Network Urges Importance of Supply Chain Distribution Planning – 12 March 2020Read more
As the COVID-19 health crisis impacts global supply chains, the FloridaMakes Network is stressing the importance of having a plan in place prior to disruptions to your supply chain. The following checklist can help your company react to and prepare for disruptions.
If your supply chain is already impacted:
Contact your local FloridaMakes Business Advisor through the FloridaMakes Network so they can advise of available resources or support.
Review potential short-term and long-term impacts to make business decisions. Develop a plan for immediately handling impacts. Existing sales orders, forecasted demand, criticalcustomers, work in process, inventory of raw materials, critical suppliers and their locations, and incoming materials on order can all affect a manufacturer’s ability to make sales and impact production schedule and staffing.
Communicate with current and alternate suppliers. They may be getting similar requests from other companies and have capacity limits and/or higher prices. Manufacturing suppliers may be impacted and distributors could see spikes in demand based on actual or perceived concerns.
Develop standard communications statements for your customers – both a response statement if a customer will likely be affected (your orders may be delayed) and a proactive, standby statement to reassure customers and quell concerns.
Contact FloridaMakes to find alternate suppliers within Florida or nationally through our NIST Manufacturing Extension Partnership National Network™️.
If you suspect there may be disruptions to your supply chain:
Contact your suppliers, carriers, forwarders and brokers immediately to confirm.
If possible, build forecasted and reasonable inventories of raw materials for which you have limited inventory and secure production and transport capacity from your supply chain partners.
Review your alternate suppliers lists or start sourcing alternative suppliers, as needed.
Consider consulting with a third-party logistics company, distributor, or group purchasing firm to determine alternate means for acquiring materials. Have your specific, forecasted needs on hand.
Identify a resource at your company to monitor the crisis and potential impacts to your business.
Develop a communications plan and standby statements for customers.
Preparing for the next disruption:
Complete a manufacturing Business Continuity Assessment (a risk assessment that includes your supply chain). Or, update your business continuity plan and implement changes to mitigate risks.
Conduct a Total Cost of Ownership (TCO) analysis to revisit overseas sourcing. Consider other countries of origin, as well as domestic suppliers who may be able to supply with shorter lead-times at lower transportation costs.
Consider dual sourcing (locally and overseas) for critical components.
Develop, refine, and train employees on your disaster response plan, and a broader business continuity plan. This would include a number of scenarios and risk mitigation measures.
Have a process to monitor global events to identify potential spikes in demand or supply chain disruptions early.
Preventing and preparing for employee illness:
Promote a healthy workplace for employees to retain your team. Now is a great time to promote good health and wellness practices, especially proper handwashing. CDC guidelines: https://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html
Identify critical roles – from customer service to shipping – and consider immediate cross-training, system access, and have an employee back-up plan in place.
Review your employee skills matrix, standard operating procedures (SOPs), and work instructions to see who can jump into other roles quickly, if needed. Contact FloridaMakes for help creating these.
Encourage employees to review their health insurance coverages, and to take care of themselves and their families.
Communication is key. Talk with your employees, customers, suppliers, distributors, carriers, and brokers about potential supply chain disruptions, and how you can work together to mitigate issues.
Collaborate with your regional manufacturers’ association (RMA) to keep updated on the current situation. Your RMA can connect you with local manufacturers that may be able to help with materials or contract manufacturing if your business is disrupted.
Remember that the impacts vary across the global supply chain, so local suppliers can also be affected based on their sources of supply.
Travel and workforce issues overseas can impact your local supply chain.
Remember that you face competing demands for global product and transport resources.
State and federal resources:
US Centers for Disease Control & Prevention (CDC) guidance for businesses and employers: www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html
Florida Department of Health resources: www.floridahealth.gov/diseases-and-conditions/COVID-19/Resources.html
Florida Department of Emergency Management (DEM) and Department of Economic Opportunity (DEO) disaster resources for businesses: www.FloridaDisaster.biz .
For additional disaster resources in the state of Florida please visit our partner’s resource site: Florida Economic Development Council