Be Disruption Ready
By Carl Hung, President & CEO of Season Group
The COVID-19 pandemic has taught us to adapt to many new things, from staying indoors for long periods, and working from home, to handling awkward zoom interruptions by cats or children. Most importantly, this pandemic has taught us to handle, and to expect disruptions. In fact, disruptions upon disruptions upon disruptions. These disruptions have always existed, occurring in increasing frequency and scale, but the pandemic compounded them. As they say, when it rains, it pours!
How to Stay Afloat?
In a world where disruptions come along regularly – such as the recent Evergreen container incident in the Suez Canal, a disruption unrelated to COVID – expecting the unexpected is key to staying on top of the game.
Understanding the Flames that COVID Fanned
There has been a supply chain butterfly effect.
When the global economy was put under tremendous stress last year, underlying systemic issues became starkly apparent. For instance, we have known for some time that the components industry has a capacity issue. It was evident by 2018 with the MLCC shortage[1] and the military parts shortage[2] that there was a systemic issue.
These issues, which were not given proper attention during the good times when everything was running relatively smoothly, became major pitfalls when the system endured additional pressure thanks to pandemic-led lockdowns. Some factories that closed in 2020 never reopened. Those that did reopen are now faced with the flood of overwhelming demand for components[3]. With the disruption to staffing, and upstream and downstream supply chain processes, the capacity issue now faced dwarfs that of 2018. Businesses across all sectors are impacted, from the automotive and medical industries which require high-tech parts[4], to the communication industry which needs telephone chips[5], the supply-chain butterfly has whipped up a perfect storm.
Pull Out the Emergency Communication Flow Charts
In a crisis situation where new developments from every direction are constant, it is necessary to have a secure, accurate, and efficient communication system in place. This is essential to ensure that information can be as symmetrical as possible across your business, especially in a multinational or multi-faceted one. New national social distancing measures that impact staffing or material sourcing difficulties have increased lead times. And these challenges can only be managed when they are clearly, constantly and transparently communicated. Given we’re in the digital age, and we have a wide range of communication tools to allow us to remain connected to everyone we work with, maintaining a healthy feed of information between suppliers, employees and customers from around the globe or across industries. This is essential to keep businesses running in crises.
Equip your Staff with the Right Tools and Knowledge
Investing in your staff is not simply about giving them the means to do their job well, it also means training them to do their job well in a crisis, and where necessary to do his/her neighbour’s job tool.
As flexible work from home arrangements emerged during COVID-19, so did team rotation arrangements. Businesses split their team with half of the team operating on-site on a rotating basis. This arrangement creates isolated ‘bubbles’ between the two teams, ensuring the safety of both and the maintenance of operations. It is in this situation that a well-trained team – that understands business operations beyond their respective, original scopes of work – is thus able to carry the business forward despite the disruption.
Be Prepared with Alternatives
As Einstein said, “we can’t solve problems by using the same kind of thinking we used when we created them.” Alternatives have to be considered. In the case of component shortages,an alternative could be a change to the design or re-evaluation of the supply base. Designs that may require fewer human processes, more automated ones, and use more easily accessible materials, or a supply base that is more diversified with more than one supply source that is regional if not local, and could be accessed via multiple forms of transport. All these factors could very well help change the game, especially if you plan for these alternatives well in advance. Agility and adaptability are key!
In a globalized, and highly connected world, disruptions we face affect all industries, all businesses, all countries and all individuals.
And as we’ve seen, disruptions will come. We have to be prepared for whatever the next disruption might be. That means starting today by establishing effective communication channels, working on employee development and investing in alternative designs or supply sources.
[1] AVNET Abacus. ‘ The global MLCC shortage: What are your options?’ 13 January 2021. <https://www.avnet.com/wps/portal/abacus/solutions/technologies/passive/capacitors/the-global-mlcc-shortage/>
[2] Source Today. ‘COVID-19 Disrupts the Electronic Parts Supply Chain’, Bridget McCrea, 11 May 2020. <https://www.sourcetoday.com/industries/article/21131026/covid19-disrupts-the-electronic-parts-supply-chain>
[3] EPS News. ‘Managing the Semiconductor Shortage of 2021, Part 1’, Barbara Jorgensen, 8 February 2021. <https://epsnews.com/2021/02/08/managing-the-semiconductor-shortage-of-2021-part-1/>
[4] Source Today. ‘COVID-19 Disrupts the Electronic Parts Supply Chain’, Bridget McCrea, 11 May 2020. <https://www.sourcetoday.com/industries/article/21131026/covid19-disrupts-the-electronic-parts-supply-chain>
[5] NIKKEI Asia. ‘Booming demand for PCs and phones squeezes tech supply chain, by Cheng Ting-Fang and Lauly Li, 9 December 2020. <https://asia.nikkei.com/Business/Technology/Booming-demand-for-PCs-and-phones-squeezes-tech-supply-chain>
