This time there are no instructions for use! After nearly 30 years of experience in Supply in France & Europe (B2B & B2C), I have never seen anything like it, a deconstruction of almost all the supply chains in less than a month… For 3 weeks now, we have been confined and every day we discover a new difficulty to execute a logistics step : reduction of the postal service for parcels, complete closure of the relay points networks, reduction of rail transport, cargo blockage in ports, slowing down of road transit at the borders etc… It is a new page to be written every morning to maintain the logistics chains and in particular essential ones such as food, health but also all the important services (fire department, security, energy, cleanliness, maintenance etc…). Being for once a few weeks ahead of North America in this pandemic, and in view of this unprecedented situation for all of us on this scale, I wished to humbly share with you some of the measures or initiatives we are observing here in Europe. I hope that this may help some of your companies on the American continent to better cope with this unprecedented wave of upheaval.
After a phase of astonishment and incomprehension in the face of the decision for strict national confinement (closure of schools, restaurants etc…) and the massive development of telework for all, we observed a collapse in a few days of road transport flows with a drop of around 50 to 70% outside food and essentials products (health, medicines etc…).
After the production crisis in China, the health crisis and the closure of our factories here in Europe, it is now the effects of the crisis of our local demand (companies & individuals). The logistics chain is therefore affected at both ends and in its productive step, which immediately led to major dysfunctions such as overstocking linked to the disaffection of customer’s consumption or the closure of stores such furniture stores. There was also population migration out of towns with a transfer of food consumption to rural or holiday areas leading to a disorganization of the logistics of mass distribution. Thus, large peri-urban supermarkets that require travel by car have seen a decline in attendance in favour of small local food stores. It is thus estimated that Paris lost about 20% of its population in the 48 hours just before confinement.
All this confirms that no one can say what will happen to the flows in the next 4 to 6 weeks.
Faced with these intense troubles, the supply chain manager must reinvent his approach and change many of his habits:
Scripting & Analysis:
Imagine different scenarios for each of the following deadlines:
- Short term 2 to 6 weeks,
- Medium term 2 to 3 months,
- Prepare a recovery plan for the time of containment release.
In the current context, so random and unpredictable, it is advisable to analyze its historical data (Purchasing, Procurement, Customer orders etc… ) to then build several scenarios for each of the deadlines. Today’s technological tools can largely help to simulate the impacts.
Then the decomposition of the complete cycle of an order allows to see which are the current zones of fragility or too strong dependence on a single actor.
It becomes possible to prepare arrangements to be made according to each scenario and no longer just undergo and try to regain some small margins in your organization. Setting up a crisis cockpit for your Supply Chain is a way to gather key information to be monitored on a daily basis.
Of course, we are now observing new hazards, and our scenarios are obviously not right, so we have to act daily without hesitation and resort to:
- Agility every day to adjust your Supply with the latest data available; you have to be inventive, very pragmatic and use common sense to think outside de box; creativity and imagination are experiencing a new dynamic.
- Cooperation with your colleagues, suppliers, customers, with neighbouring companies even If they are from a different sector. It is time to cross and share your difficulties to see if the expertise of other sectors can help to find new solutions and compensate for unavailable materials or products, complementary or alternative means of transport etc….
Finally, as we are all concerned, see if you can help with your operational infrastructure and your Supply skills, the health sector which is suffering a lot with the massive influx of sick people and which doesn’t have infinite means in logistics to manage this crisis. You will probably help save lives.
ABOUT THE AUTHOR:
After 20 years of experience in logistics and distribution services companies, Augustin GUELDRY founded Colicoach, a consulting firm specialized in Supply Chain: Digital – E-commerce – Innovation – Datas – Urban Logistics.
For 10 years now, Colicoach has been advising and accompanying, with enthusiasm and pragmatism, companies in Strategy & Operations to adapt their supply chain to changes in B2B & B2C consumption practices and find innovative solutions.