If there’s one thing that an organization can always count on it’s that their supply chain will experience disruption at some point in time. Supply chain disruptions happen every single day. Some disruptions have minimal impact, and some have significant impact; all vary based on source and circumstance. However, because the frequency of supply chain disruptions is unpredictable, it’s critical to take defined actions to manage and mitigate these disruptions.
Below are three key actions to take before, during, and after a supply chain disruption occurs. You will notice that these actions are not solutions, they are “pre-solutions.” Implementing them will put your organization in position to develop solutions quickly and efficiently to minimize excessive waste associated with a given disruption.
1. Develop an Escalation Plan
It’s critical to understand when and how to escalate a response to a supply chain disruption. Not all disruptions are the same and resources are limited. So, it is important to know when a more measured response is required. This can be achieved by documenting an escalation plan and developing an RACI (Responsible, Accountable, Consulted, and Informed) communication matrix to use during a disruption event.
The escalation procedure must account for varying levels of disruption and have different RACI matrices associated with them. For instance, if a truck breaks down at the loading bay the escalation plan would prescribe a much smaller response than if the assembly line broke down. Having a procedure in place that pre-defines the appropriate escalation procedure to a disruption will conserve resources and ensure the disruption is mitigated efficiently.
2. Quarantine & Adjust
When a disruption occurs, the goal must be to stop the bleeding and find the critical path to get your operations up and running again. Consider a scenario where a manufacturing process error produces a significant amount of non-conforming parts, which are a critical part of a larger assembly. The instant this non-conformance is identified, the process must be immediately shut down, and the disrupted parts must be captured and quarantined.
In parallel, actions must be taken to adjust the manufacturing process and/or launch production of the critical part at a different location. The latter will require the forethought of developing redundant processes and supply options, but still highlights the fact that efficiently quarantining and adjusting resources to offset disruption effects is critical for mitigation success.
3. Methodically Gather & Store Information
During a supply chain disruption, it’s imperative to gather as much information as possible. Resolution timelines are necessarily compressed, and information is moving at warp speed. Because of this, it’s understandably easy for information to be widely dispersed during a crisis and once resolved, compiling it all in one place is often an afterthought. The issue here is that when information is not captured appropriately there isn’t an opportunity for a thorough “post-mortem” aimed to improve future responses to disruptions.
Therefore, all pertinent information should be captured and stored in a common location. Once the disruption has resolved this information can be sorted and sanitized as needed to capture lessons learned. Without methodically capturing information, there will be gaps in the post-mortem review and the lessons learned, which will lead to a poorer response than necessary during the next, inevitable, crisis.
There are many actions that can – and should – be taken during a supply chain disruption. They come in all shapes and sizes to fit the needs of the event. However, they should all tie back to these three actions in some way. Thoughtfully executing these three actions will ensure that future disruption downside is mitigated, and resources are conserved.