Governors State Supply Chain Expert Offers Tips to Business Owners
Governors State University's Professor Tricia Kerns, a Supply Chain Management professor and a Lean Six Sigma-certified industry expert, is a leader with the university's Supply Chain Innovation Center and Business Incubator (SCICBI), the state's only supply chain incubator.
Here, she reflects on how the COVID-19 pandemic will impact businesses and advises owners how to protect their bottom line.
"In this time of uncertainty, the state of our supply chain network can determine if our business landscape will ever be pre-COVID-19 virus again," said Dr. Kerns. "From planned forecasts to future projections, consumer behavior will most likely be forever changed. Regardless of what industry you are in, your company's flexibility will be tested on survival rather than profitability and earned market share. Our economy's ability to rebound will depend on how adaptive our supply chain network is post-COVID-19."
Here are Dr. Kerns' tips to help businesses stay on top:
1. Communicate with Partners
Prioritize communications with your company’s supply partners and all parties that may be within your supply chain. Assess your supply base and the financial health of their companies. Will they survive a longer-term shut down? Make plans now, just in case.
2. Look to Parent Companies
With longer-term partners, can the parent company provide assistance to help the smaller suppliers stay in business? This may include building inventories, shortening terms to help with cash payments, submitting longer term purchase orders, etc.
3. Know Your Customer
Be sensitive to your customer’s needs. As able, work on your Supply Chain to keep a “pipeline” of revenue flowing. This may include satisfying your customer base from top to bottom based on overall revenue. Are there new customers evolving as the crisis changes the U.S. market place buying habits?
4. Revisit forecasts
Learn the short-term and long-term impact to your market place both during and after the crisis. Revisiting forecasts now will help with bottom line projections for the near future.
5. Evaluate Globally
Should you bring back products to the U.S. now to avoid searching for a new global supplier? Can you produce supply in the U.S. and learn the potential impact to your bottom line? Making products here will drive costs higher and may not be welcomed by U.S. companies as the end result is not a long-term partnership but a temporary solution.
6. Keep in Touch
Find various methods to keep communicating with your customer base and supply base to keep everyone informed. Make swift decisions on both short-term data and long-term forecast adjustments.
7. Know Your Inventory
Evaluate inventory levels to know the hardship impact to your bottom line. What will your price point be in 3-6 months?
8. Introduce New Products
Continuing to invest, as able, in new product introductions will aid in your success as markets open.
9. Reduce Your Forecasts
Forecasts are built with a natural and expected error. Plan for the worst and adjust now.
Dr. Kerns brings 20 years of experience in the Management of Operations/Supply Chain industry, including management of manufacturing, procurement, supply chain, global sourcing, distribution, warehousing, transportation and supply chain excellence. Along with teaching Supply Chain Management courses, she is the Associate Director of Governors State University’s Supply Chain Innovation Center and Business Incubator (SCICBI), the state's only supply chain incubator. Dr. Kerns holds professional supply chain certifications from the Association of Supply Chain Management (ASCM) Logistics, Transportation and Distribution (CLTD) and Production and Inventory Management (CPIM); Council of Supply Chain Management Professionals (CSCMP) Certified in SCPro Level 1; and Lean Six Sigma Black Belt Supply Chain Certified