Supply Chain Management

The Coronavirus can kill companies too!

Dr. Wolfgang Partsch

The hysteria generally triggered and whipped up by the media about a new virus, whether justified or unauthorized, is completely irrelevant at this point, hindering, interrupting or destroying important global supply chains. Every producing or trading company, which travels internationally or globally, is affected, no matter how big it is.

This event is also symptomatic of other incidents that disrupt international supply chains, such as natural disasters, capricious and nonsensical decisions by powerful politicians and much more.

It is important for company management to understand that traditional methods, procedures and processes are no longer sufficient or even useless to cope with such unpredictable events of major importance. Certainly it is clear that planning is important for every company to produce and distribute products. But planning in the conventional sense has lost its importance. Today and in the future, the most important thing is supply chain agility, i.e. the ability to react quickly to foreseeable or already occurred events that affect my company. Today, it is no longer sufficient for management to carry out supply alternatives through various planning staffs in sequential calculations, the results of which are often only available in several days, weeks or even months and can serve as a basis for decision-making. The CEO, COO and/or CFO today needs results of alternative scenarios in hours to make decisions for the well-being of his company in a world of unexpectedly occurring disruptions.

This has been the basic idea of proper supply chain management for about 40 years, which has already been recognized and implemented by some companies, but is still not sufficiently utilized by the majority of companies worldwide. The reasons for this are primarily a lack of know-how, an innate fear of change, as well as concerns about risking financial resources in something that is difficult for non-experts to grasp. The question here is not what it will cost me if I introduce modern supply chain management, but rather what it will cost me if I don’t do it. If someone in my industry does it and I don’t (yet), then I am at least potentially on death row, because supply chain management directly influences more than 50% of the costs in every company. Despite all the uncertainty and helplessness in many management levels to tackle this existentially important topic in the right way, there is one piece of good news: The optimal orientation, a supply chain management tailored to each company, is actually and finally available today! It begins with the revision of the processes and the organization in the company. This completes about 80% of the work, the rest is technology as a tool for sustainable success. Ask the supply chain experts from mSE Solutions in Munich, Chicago or Singapore. They have the relevant experience as well as the right answers and solutions for the future of your company.