Prof. John V. Gray, The Ohio State University, and Prof. Finn Wynstra, Erasmus University
COVID-19 – Lessons for Sourcing
This article is originally published by Supply Chain Management Review on 5 May 2020, and we re-share it with permission.
The pandemic has considerably changed many aspects of life. In this paper, Gray & Wynstra focus on some critical lessons for managers in manufacturing firms in charge of strategic sourcing decisions. That is, managers responsible for selecting and managing upstream suppliers. Gray & Wynstra explain what to do and not to do now, in the light of the COVID-19.
“The Coronavirus has highlighted some things that companies have always needed to do, but may have become a bit complacent on due to the lack of a major disruption event in recent years. […] The actions we detail below can help in any sort of disruption. Since nobody ever gets credit for fixing problems that don’t happen but disruptions are now at the top of the C-suite’s minds, it’s a good time to obtain the resources to better prepare for the next major supply disruption by improving systems and processes to make supply bases more robust. The next disruption could be a geopolitical issue, a devastating natural disaster, a widespread cyber issue, a dock strike or recurrences of the current pandemic that continue to upend a recovery.”
The actions Gray & Wynstra recommend include the following:
- Map the supply base
- Update “general” playbooks for disruptions
- Reduce extended payment terms levied on suppliers
- Change the way sourcing managers make decisions
- Treat suppliers ethically
However, they warn about dramatically altering make vs. buy decisions and withdrawing all international/global activities back home.
Read the whole article, including the reasoning for abovementioned guidelines, here.