October 06, 2020
October 06, 2020
Contributor: Rama Ramaswami
Major disruptions resulting from the COVID-19 pandemic caught supply chain and logistics operations off-guard. These six steps can speed your response to any crisis.
Logistics leaders are used to dealing with disruptions such as shipment delays or demand spikes. But when COVID-19 hit, they were blindsided.
In the wake of that turmoil, logistics and supply chain leaders are scrambling to overhaul processes to manage logistics upheavals.
“We didn’t see COVID-19 coming, and we certainly couldn’t control it,” said David Gonzalez, VP Analyst, Gartner, during the virtual EMEA Gartner Supply Chain Symposium/Xpo™, 2020. “These unpredictable events require all of our attention when they do occur because of the magnitude of their impact.”
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Although many types of events — geopolitical, technological, environmental — can throw logistics networks into disarray, it’s possible to establish a somewhat standardized process framework for handling disruptions.
Before framing a response, logistics leaders should understand the full scope of the disruption: The geographic reach of the affected areas, the trade lanes and modes involved, and the type of freight at high risk. Be sure to consider the interdependencies of the global supply chain.
“For example, your supplier may source components for raw materials from an affected region, and it can impact your operation if the supplier experiences shortages,” Gonzalez said.
Learn more: Agile supply chain strategy
After determining the geographic impact of the disruption, logistics leaders need to focus on six key areas (the six “C’s”) when organizing a response.
In the aftermath of any logistics disruption, evaluate the performance of your logistics organization to identify what went well, what could have gone better and where urgent improvements are needed. Pandemic-related disruptions have exposed many gaps in logistics operations, including a lack of documented processes for dealing with disruptions and continuity plans created years earlier and not updated since.
Rather than fearing disruption, logistics leaders must embrace it by evolving their logistics networks, functions and processes as a result of the disruption.
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Recommended resources for Gartner clients*:
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Gartner COVID-19 Resource Center
*Note that some documents may not be available to all Gartner clients.