Hi, welcome to my first blog. I am Bruna – a Business & Economics graduate, working in the food industry as a Supply Chain Manager. I am by no means an expert in Supply Chain, but I am obsessed with learning from both online resources and invaluable mentors in the field in the Windsor-Essex area.
Reacting to change – what does it mean for our operational goals?
As many of you, my world was turned upside down a few months ago. The only constant that remained was that working in supply chain continued to progress to new levels of difficulty. For years businesses have been focused on reducing inventory of raw materials, cost minimization and increased efficiency with longer production runs. Even under normal operating conditions, this is often challenging. However, I have found that many companies have turned Just-in-Time inventory models into their reality and definition of success.
Unprecedented events like COVID-19 introduce new bottlenecks to this model due to a decrease in labour availability, freight reliability and disruption to supply synchronization. Additionally, the JIT model is built on assuming predictable consumer spending patterns through various data analysis tools and technologies. Over the last few months these patterns have suddenly shifted.
Order volumes for food manufacturers increased by up to 500% in the last two weeks of March, according to a Food and Consumer Products of Canada (FCPC) report released on April 2, 2020. The inventory of food has been moving from warehouses and grocery shelves to basements of households across North America. Many businesses have been focusing on reacting to this increased demand with the limitations that COVID-19 brought upon them.
Collaborating in times of overcapacity and labour shortages
Tier 1 suppliers were not prepared for the increase in volume and experienced issues with securing sufficient supply in the required timelines. Solutions to bridging the gap varied from alternate sourcing to understanding capacity constraints and leveraging overtime to increase production. In some cases, providing the required supply has not been possible therefore businesses have had to partner and negotiate the minimum resources required to meet contractual obligations. For me, this meant learning how to negotiate in an environment where everyone is overwhelmed due to uncertainty in business and personal lives. When traditional techniques and escalation models did not prove successful, in normal millennial fashion, I turned to online resources for help. Some of the articles and podcasts I found helpful are listed below. The one common theme amongst them? Identifying emotions, empathizing and using emotional intelligence to influence others. I started with practicing active listening and identifying emotions both mine and of those across the table (or computer screen).
Increase visibility within your supplier network
As you might have experienced by now, working through COVID-19 requires creative strategies and on-the-spot decision making ability and both of these are dependent on access to real time data and information. This shed light to issues in the current supply chain, such as the lack of visibility and data interchange between customers and suppliers. Often for small/medium sized businesses advanced technology solutions are not available and the lack of information causes delays in reaction. Information that would have been valuable in that initial reaction phase is visibility to inventory levels, production schedules as well as tier 2 supply sources and impact on operations.
Even though overall Canada has shown that measures such as physical distancing seem to work in flattening the curve, as of this week cases in Ontario continue to increase The Federal and Provincial government have expressed concerns around lifting restrictions for both individuals and businesses. Since timelines for COVID-19 are uncertain, this might be the right time to utilize existing tools to increase communication and data sharing between you and your Tier 1 suppliers. This will enable your business to improve demand-supply synchronization as well as provide valuable information to creating backup plans in case of supply shortages.
What are you learning? Stay in touch!
While we experience these unforeseen circumstances the just-in-time inventory model will continue to be pushed to its limits. The details of how to adjust your JIT model to absorb delays and manage this disruption will change from industry sector to sector and even company to company. However, the frameworks and tools used might be helpful across all sectors and businesses in Windsor-Essex. I would like to invite all women in supply chain and manufacturing in our area to share their tips and strategies on adapting to this black swan event we’re facing.
List of resources:
Chris Voss – Art of Negotiation MasterClass
Avoid These Traps When Negotiating in a Crisis – Harvard Business Review
How to Negotiate with Powerful Suppliers – Harvard Business Review
Lean In Global Community – https://Leanin.Org/Virtual-Circle-Resources
Emotional Intelligence And Negotiation: The Tension Between Creating And Claiming Value – International Journal of Conflict Management
Successful Negotiation: Essential Strategies And Skills – Edx – University of Michigan Course
Supply Chain Management: A Decision-Making Framework – Edx – Louvainx
Supply Chains For Manufacturing: Inventory Analytics – Edx – MIT