COVID-19 Creates Supply Chain Disruptions in Many Industries

COVID-19 has created a significant disruption to our global supply chains.  We are seeing shortages and interruptions in almost every industry, ranging from health care supplies to consumer products.  Shortages like toilet paper and hair dye are widely publicized and are mildly amusing when we compare them to the serious impact of this global pandemic.   But most supply chain shortages are not a laughing matter.  In health care our hospitals and health systems are fighting a battle to keep lab products on the shelves so they can test patients for COVID, and our hospitals cannot find supplies of the personal protective equipment (PPE) they need to protect their care givers.  It’s been a mess.

Supply Chain professionals constantly weight the risk versus reward of inventory management processes.  Our job is to keep inventory low in order to improve cash flow, reduce storage space, and reduce inventory obsolescence and spoilage.  But we cannot build products in manufacturing or serve patients in health care without adequate supplies inventory.  We’ve implemented lean / six sigma principles into our inventory management purchasing processes, and these policies work well during periods of minimal supply/demand variability.  We do not plan our supply chains with consideration for global pandemics, because they are too infrequent and there are too many planning variables.

The COVID-19 pandemic has taught us that we must take supply chain risk management more seriously.   We must build contingency plans for the “what if”.  We need to have multiple alternative suppliers approved for products and services and create supply chain teams that can be responsive and flexible.  We need to keep safety stock of products that are the difference between life and death.  As the saying goes, we must hope for the best and plan for the worst.  That doesn’t mean we should keep excess inventory on hand for everyday products, except for, maybe, toilet paper…

Brent Bolton

Brent Bolton

Supply Chain, Director
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