As we know, COVID-19 has turned the world economy upside down. Just two or three months ago, most distributors and others working with the world supply chain viewed 2020 as a year of growth and opportunity. Now, many of us are unsure what shoe will fall next. Further, and even more importantly, how the pandemic and beyond will impact our businesses—and the entire supply chain and distribution industry.
As most of us are aware, the outbreak began in China. It caught everyone’s attention in early 2020, but some reports now indicate it may have been spreading in late 2019, long before anyone was aware of its existence. Since then, the virus has hop skipped around the world. One of its last stops was in the U.S., where it appears the world’s highest number of cases—and its highest number of deaths—will occur.
COVID-19s impact on world economies and supply chains has been nothing less than profound.
Further, some believe it may get a lot worse before it gets better, impacting many industries including professional cleaning, health care, hospitality, and packaging, all of which are dependent on both raw materials and products from China.
“China’s dominant role as the ‘world’s factory’ means that any significant disruption in China puts the entire world supply chains at risk,” according to a recent report by Deloitte, a leading financial and industry advisory firm.
“Highlighting this is the fact that more than 200 of the Fortune Global 500 firms have a presence in Wuhan, the highly industrialized province where the outbreak originated, and which has been hardest hit.” The analysis goes on to say that companies and industries that rely on this supply chain “are likely to experience significant disruption.”
So, where does this leave us? What steps can North American distributors take now to protect their business operations and end customers? Following is a list of some steps that can be taken.
Stay on top of industry news.
In the U.S., more than 15 trade publications focus on supply chain issues. They may serve different industries—packaging, cleaning, health care, freight, and so on—but these will likely be your best resources for up-to-the-minute information. The key focus of these publications is serving the industries they represent. Further, publications like the Wall Street Journal, Barron’s, MarketWatch and SmartBrief cover supply chain and distribution news regularly.
Protect your human capital.
All office staff who can work remotely should do so. This will help reduce the risk of infection throughout the company. For employees who can’t, such as drivers or warehouse workers, your focus must be on instituting safety measures and ensuring workers abide by them and increasing cleaning and disinfecting procedures throughout the facility. Where staff work closely together, this may require installing partitions to separate them from one another.
Most distributors have vehicles used for pickup and delivery of goods. These are often overlooked but it is imperative they be cleaned and disinfected daily. This includes all touchable surfaces, not only in the driver’s area but also in the back of the vehicle. Also set limits on how many staffers can be in the vehicle at the same time and require that they wear masks and gloves.
Create a COVID-19 task force.
We are going to be dealing with this virus for some time to come. One of the task force’s duties will be ongoing education—essential to ensuring that staff remain safe and healthy. The task force will monitor staff for following proper safety protocols, including regular hand washing, social distancing, and wearing masks, gloves, and other protective gear. Remember: Complacency can lead to infection.
Focus on alternative ways to do business.
While most distributors now have e-commerce sites, many prefer to work with their customers in person. For the near future, which may not be easy. Distributors should expand and improve their e-commerce sites as quickly as possible. This will help generate revenue and future-proof your business going forward.
Partner with a distributor-member organization.
Many independent distributors throughout North America are in an exceedingly difficult position right now. It is much harder to address this global pandemic and the wrath it’s unleashed on businesses, and specifically on distributors, when their own. This is a good time for independents to consider becoming part of a nationwide distributor-member organization. Very simply, there is strength in numbers.
Traditionally, many distributors remain loyal to a fixed number of suppliers, and these are their business partners. While this has worked well in the past, distributors should now investigate diversifying. They must develop relationships with additional brands and suppliers. Creating a list of multiple approved suppliers that can be called upon when needed/as needed is far better than putting all your eggs in one or two baskets.
Right now, the entire supply chain is coping with the current set of circumstances. Nothing like this has ever happened before, so the situation is understandable. But going forward, we must be proactive. Supply chain interruptions resulting from climate change to natural disasters have impacted, and will impact, supply chains and distribution in the future. Developing a long-term strategy to address these instances will help guard your company against future threats.
Michael Wilson is vice president of Marketing and Packaging for AFFLINK, a global leader in supply chain optimization, packaging, and developers of ELEVATE, providing clients with innovative process and procurement solutions to drive efficiencies in today’s leading businesses. He can be reached through his company website at www.AFFLINK.com
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