Today’s global supply chain leaders know to expect the unexpected. They prepare for natural disasters, sudden regulatory changes, social and economic shifts, and even cyber attacks. But some events are more disruptive than others. The recent outbreak of coronavirus has shaken communities and put companies that rely on manufacturing from facilities in Wuhan, China at risk. Global companies are considering alternative suppliers as facilities in the region face potential production delays. The number of coronavirus cases continues to rise, and the region has implemented a quarantine, limiting transportation and the flow of goods. The impact isn’t completely clear nor is the timeline, making planning even more difficult. The interference in the lives and health of so many people has magnified companies’ desire to act quickly to control its impacts. That, combined with the continuing unpredictability of the outbreak, has added new urgency to the need to know sooner and act faster.
A bad prognosis for sequential planning
In the best case scenario, your planners would have had three weeks – from the identification of the coronavirus until the day of the Wuhan lockdown – to execute a supply chain contingency plan or find alternatives. That’s not enough time for the slow, sequential planning processes that many organizations use today. These processes were designed for an era in which teams worked in silos, data gathering happened in disconnected spreadsheets, and manufacturing happened in the same city - not in another hemisphere. Sequential planning may take days or even weeks just to determine the financial impact of a lockdown, not to mention possible manufacturing alternatives. In a fast-paced emergency situation, that delay isn’t acceptable. In instances like Wuhan’s coronavirus lockdown, dependable supply chain planning processes are especially important because the very planners devising alternatives for a facility are often those directly affected by the crisis. In contrast, modern planning processes are prepared for today’s global, always-on marketplace and constant change. Planners need to get an understanding of the alternatives and impacts in minutes, not weeks. They can handle everyday challenges, like managing faraway contract manufacturers, and once-in-a-decade disruptions, like natural disasters and viral outbreaks.
A cure for inefficient planning
Instead of imagining what your planners would be able to accomplish with an outdated planning process, imagine this: your company is notified of a lockdown in Wuhan. As soon as the factory closes, your entire global network knows about its effects the same day. Everyone can see its impact at a corporate, business and individual level.
They can also see the closure’s impacts on the rest of the network. Processes in your planning software instantly alert planners to parts of the supply chain that will receive late shipments and what percentage of those shipments will be delayed. Planners don’t discover this information after hours or days of hands-on analysis. They see it within seconds, in an intuitive, graphical interface populated by algorithms embedded in your planning software.
As soon as they have this information, these planners investigate alternative sourcing using scenario planning playbooks. They find a facility that can fulfill orders and restore health to the entire supply chain.
Planners even use key business metrics to evaluate the financial impacts of changing production facilities. Before the end of the day, planners have created a contingency plan that will fulfill orders on time and within budget.
You’re not imagining some far-off future. This process is already in practice at leading companies around the world. It’s called concurrent planning, and it has become essential to many operations because it is fast, connected and reliable. It’s helped Procter & Gamble supply families with much-needed goods in the aftermath of Hurricane Irma. It saved Lippert Components millions in the face of unexpected tariffs. And, it kept Keysight Technologies’ from canceling customer orders, even after a wildfire destroyed its headquarters. Concurrent planning is the process of developing and managing synchronized plans across the entire supply chain. Each node in your supply chain is connected to the next, and each team shares data with the others. If someone makes a change at one end of the system, it’s instantly reflected up and down the rest of the network. Everyone stays strategically aligned, informed, and confident, knowing that their decisions will lead to success. We’d like to believe the benefits of concurrency go beyond supply chain planning. These processes bring clarity to complexity, unite communities – even when they’re miles apart – and connect everyone to a shared mission. In the face of challenges like the coronavirus outbreak, these capabilities help people resurrect their power, optimism and stability.