Crisis Management: How to Prepare for Major Supply Chain Disruptions

The outbreak of coronavirus has become more than an isolated event. It has impacted supply chains negatively and disrupted the way they function. To ensure the success of your company, it is essential for you to invest in supply chain resilience and minimize those risks.


Coronavirus is spread through person-to-person contact and many governments have implemented lockdowns and restrictions in order to contain the virus. These responses have negatively impacted international markets as it has stopped international supply chains and suspended business operations due to travel restrictions.  Companies are now trying to keep up with production in order to meet demands.


Dealing with Crisis in Supply Chain


The virus has additionally created new challenges as consumers have started panic buying since they stock up for quarantines or lockdowns. More consumers have also switched to delivery options in order to avoid making trips to stores. In order for businesses to survive, they need to develop supply chain management crisis responses. They need to act early in order to navigate through the crisis and stay ahead of the curve. These responses include:


  • Creating contingency plans – This requires companies to create scenario planning strategies. They consider the different demands each environment will be faced with across the supply chains. This requires developing optimistic and conservative scenarios for the business. In the context of coronavirus, an optimistic scenario would be that the virus will be contained, and operations will be returning to normalcy soon. In a conservative scenario, this would mean accepting that the virus will be around for a long time and that its effects are lasting.


  • Mitigating supply shock – Businesses should consider creating a business continuity plan with their existing suppliers. They should aim to also diversify their supply chain in order to protect themselves against shortages, especially for those that are mostly in demand. They should aim to balance sourcing resilience and flexibility with cost. Businesses can use this opportunity to offer more unique and customizable products. This will curb the supply limitation in order to serve customers.


  • Managing increased demand – In order to manage the increased demand for certain products, companies can decrease promotions, create stock reserves and prioritize products that are being bought in bulk. It’s important that businesses do not increase the prices as there becomes a greater demand for them. When they do this they risk damaging the relationship with customers. Instead of taking that risk, they should implement strategies to control the demands with suppliers. They can also use aggregate metrics such as seasonals shopping habits in order to be more prepared for the increase in demand.


  • Creating a safe working environment – It is essential for businesses to keep the consumers and their workers safe. Another way they can keep the employees and consumers safe is through contactless payment and deliveries. They can use the “tap-and-go” payment method which eliminates cash transactions. Businesses should also follow leave-at-door deliveries allowing customers to choose where orders should be placed and when they can be delivered.



Preparing for Coronavirus aftermath on Supply Chains


While companies cannot predict a global and economic crisis, the supply chain leaders need to plan properly in order to be better prepared to handle future disasters. In order to achieve success, companies should not focus on getting through today but rather managing with long term. Supply chain strategies that companies can implement now to better prepare for future disruptions are:


  • Utilize technology – Using new technology helps companies solve supply chain disruptions. This can be done through applying artificial intelligence that can pull together as much data from your company and companies within your industry. Companies that adopt technology can benefit from movement of stock through automated machinery.


  • Diversify supply base – Having diverse suppliers can be a good thing. Ensure that your supply chain has suppliers in different places. In the case of a disruption, you will not be affected greatly as you would be able to avoid any risks or shortages. Ensure that you also have local supplies and that you don’t rely greatly on global suppliers.


  • Plan for future disruptions – In order to avoid future disruptions like those caused by the pandemic, businesses should build quick responses to the supply chain. This can be done through mapping where they interact with all their suppliers to understand how they implement their sites and processes. They should always understand what is going on around them in order to be in the loop about global supply chains and hear about disruptions earlier. This will give them ample time to plan a mitigation strategy while understanding how this impacts their products.


  • Build up inventory – Having a stockpile of inventory will allow your business to operate efficiently in the event of a disruption. Try to diversify inventory, such as storing finished goods and raw materials. This would maintain your business if your supply chains were temporarily cut off.


  • Partner with a logistics expert – A supply chain expert is an asset to any business as they can step up and offer support when you are faced with disruptions. They can assist with issues such as locating alternative courier solutions and navigating fees and surcharges.




Coronavirus has highlighted the supply chain vulnerabilities that exist. The supply chain may have been permanently disrupted and may never be the same way as it was before. Businesses must find ways to overcome the challenges that they are experiencing now in order to succeed long-term.



Learn more about The After Effects COVID-19 Will Have on Global Supply Chain.