The Grainger Center for Supply Chain Management asked its board members how they’re dealing with the COVID-19 pandemic, and what supply chain managers should learn from it.
Manager of US Transportation & Logistics at Kohler
“From a learning aspect, I think the ability to quickly react and implement change is a critical skill set to have in supply chain management. With the situation at hand, those who can do this quickly will be able to adapt their supply chain to the changing situation and be more mobile to change as needed. Furthermore, I think this will shape how supply chains are designed in the future and how to better mitigate risk, even if the chances are small. What would the impact be and how do you continue to service the customer?
Overall, this situation shows that supply chains are critical to any business. Furthermore, supply chains are a critical part of ensuring the safety of people during these difficult times, e.g., at hospitals, grocery stores and medical supply firms.”
Managing Director at F45 Training
“The COVID-19 pandemic is causing our entire business to pivot. What was normally a brick and mortar-only offering has now had to pivot online. This puts us into a new segment, with new competitors and new pricing. It has to happen immediately too. So, it’s causing our entire business model to get flipped on its head.
Additionally, as a small business, it is impacting our financing and finances. Small business makes up 40% of the US economy. So the government has taken swift action, by government standards, to help out this critical part of GDP. But, financing often goes through the government via SBA loans and there is a bottleneck being created for the distribution of funds. So it is driving cash flow concerns right now as we think about payroll, real estate, and operating expenses.
What I’m concerned about and trying to plan for is the shock to the global supply chain once it gets back to “normal.” We are in need of our equipment and it has not shipped from Asia yet. So when that does ship, will it be in time for us to get it in time to open our doors when allowed by the government? I am anticipating backups at ports. The franchisor, F45 Training out of Australia, never offered inventory to be kept domestically or looked for alternative domestic, or Mexican, suppliers. They regularly saw 8-week deliveries that delayed openings of studios which means paying rent ($8k per month or more) and missing out on $11K in revenue per month minimum. It isn’t like ports haven’t had issues before COVID-19 either. Roughly two years ago LA ports went on strike, causing bottlenecks around the country. So companies that are not “supply chain centric” still need to think strategically about how it impacts their business and their customers. They need to hedge, diversify and plan for the worst – especially brands like ours that are in growth mode.”