How to Protect Your Supply Chain from Unexpected Disruptions

By John Cox,

National Accounts

Technical Transportation, Inc

If the COVID-19 pandemic has taught us anything, it’s the need for companies to better protect their supply chains from unexpected disruptions, whether caused by a pandemic or other natural or man-made disaster.

In this blog, we look at how manufacturers can better prepare their supply chain and logistics operations to help mitigate the impact of future adverse events.

Communicate Proactively, Clearly and Daily

First and foremost – and what should be your top priority – is establishing clear and open communications between all of your supply chain and logistics partners. To that end, here are some questions you should be considering:

• Do you have an existing cadence of updates from your partners regarding the current status of the products or services they are impacting?
• Have you been given access to reports by your partner showing real-time updates of service completion for the work they are handling?
• Have you clearly defined your expectations for services and outlined the metrics for the scope of work?

The best partners will reach out to you proactively and often communicate the status and capacity of their operations, how they can keep your products moving, and any potential impacts to your customers or the metrics of the scope of work.

You also need partners with the infrastructure to meet your needs. Your process needs to account for changes driven by the customer (such as requirements changes, scheduling changes) as well as changes driven by the environment within they operate (labor capacity, availability of equipment, accidents, human errors, natural disasters, and current events in the local market or nationwide that can cause disruptions to service). Questions to ask include:

• Do they have operational capacity that allows some flexibility during disruptive markets?
• Can they adjust their deliverables mid-stream, if need be?
• What is the expected communications strategy if something changes during the course of the project?

Communication is critical in these situations, and making sure your expectations are known and understood by your downstream partners will help you stay in a proactive state rather than reactive.

Put Contingencies in Place

You also need to understand your logistics partners’ contingency plans. Take logistics in the current market for example. What happens if a local driver gets sick with COVID-19? What does that mean for the other employees within that office? How will your products get delivered if the exposure triggers a shutdown of the facility?

Contingencies will be critical for ensuring your logistics needs can be met during times of disruption. Things to look for in a partner include:

• What processes are they proactively implementing to mitigate the risk of service interruption in light of current challenges (e.g., COVID-19 exposure)?
• What reserves do they have in any given marketplace, and how many resources do they have at their disposal should anything happen in a local market?
• In the event that the primary process for completing the service should be compromised, do they have secondary and tertiary support arrangements?
• Do they have a reliable network of partners and providers to lean on to keep your supply chain running smoothly, allowing them to commit to servicing your products and honor their commitment?

You also need to understand where the assumption of risk falls if unexpected issues arise. What exceptions are covered by your partner as part of your service agreement, and what issues are you responsible for as the shipper?

Understand the True Capacity of Your Partners

Another consideration is your 3PL’s personnel resources that are committed to their payroll (i.e. their own employees) because it’s important to know what true capacity they have to serve you.

What can they handle if they are placed with more responsibility, or if someone gets sick? What will be the impact if part of their team has to be furloughed? Can they perform any capabilities virtually, such as moving to online training for your products? Can they automate any of their processes to make it easier to manage virtually with fewer amounts of resources?

These are all considerations a logistics partner should be able to address with you, ensuring you have the right team who can handle your needs.

Make Sure Your Partners Have Good Technology

The logistics industry has not always been at the forefront of technology adoption; however, there are better technologies in place today that make the supply chain more streamlined and efficient. To help offset any issues that may arise from a major market disruption, you should have the confidence that your 3PL has invested in the technologies needed to minimize any disruptions to the supply chain.

In this current pandemic era, this has required 3PLs to have the ability to replicate a large part of their job function in a digital or virtual experience. Make sure your partner has documentation- capture capabilities for all of the critical points in the supply chain process, including:

• Access to the real-time status of your shipment throughout the transportation cycle
• Shipment updates provided at each major hand-off during transit
• Virtual access to proof-of-delivery capture and review through digital photos and signatures

The latest technology can perform these functions, so if your partner doesn’t have those capabilities, it can slow down all the functions in your supply chain.

In the end, there is no way to fully make your supply chain pandemic-proof. However selecting partners that have the infrastructure, team and technology in place to offset any potential disruptions will go a long way to ensuring your own company’s continued success during the most difficult of times.