The coronavirus outbreak, which has spread from China to every continent on Earth except Antarctica, is disrupting global supply chains.
Most factories in China, the disease’s epicenter with more than 80,000 people sickened, have closed and are reopening slowly, as have many others in South Korea and Japan, the sites of other large Covid-19 outbreaks.
Keeping workers away from the factory floor seems to be a common policy for governments confronted by the disease’s spread. The outbreak is also challenging companies that use multi-site Enterprise Resource Planning software platforms that analyze and manage data from tight supply lines.
If anything, the coronavirus represents a coming-of-age demand for ERP systems. As large and small businesses in the United States are confronted by the outbreak, owners and managers will have to remain agile if they are going to meet customer needs.
Luckily, due to the global nature of the crisis, customers are willing to grant your business plenty of understanding. But business owners should be under no illusions about the sensitivities of supply chains disruptions, even slight ones. Thousands of US plants are already experiencing them, even though Main Street hasn’t yet.
Are you battle ready?
The large corporations already disclosing they have been affected by the Chinese shutdown read like a Who’s Who of the Fortune 500, but do you know if your ERP platform is battle-ready and whether it can help you cope with a disruption?
ERP systems can provide in-depth intelligence on potential exposure points within your supply-and-distribution systems. The platforms have become increasingly sophisticated and adaptable and some may be able to model possible disruption sequences before they occur. Running several sequences should be one of your first tasks if your system is capable of performing them.
Your ERP platform should also deliver insights on which employees are needed for on-premises operations and for your distribution network should your company be forced to function with a reduced floor force. If quarantines or lockdowns are declared in your area, what sorts of back-up resources are in place, for example, in other states? How easily can they be accessed?
Shouldn’t you assess how many employees, and which ones, can work at home should your business be required to reduce staffing? Working remotely has been done in China where ERP systems have allowed some businesses to continue to draw on staff at home.
Impact scenarios
If you feel your business is operatingOpens a new window within a tight supply network, now is the time to focus on possible impact scenarios. You should use the data available from your ERP system and those of important strategic partners to develop the operational solutions your company will need to be able to continue to operate and fulfill orders during this crisis.
Key takeaways:
- Coronavirus is having a severe global impact on supply chains and is forcing hundreds of factories in Asia to shut down. There is a real possibility that US businesses could face similar challenges.
- ERP systems provide companies with the scope to assess the possible impact of supply chain disruptions, including those you may be experiencing already, but also those which could occur in the near future.
- ERP data can be used to work out how your company can continue to operate with a reduced workforce and how other parts of your business can assist, for example if you have out-of-state or third-party resources.