Could your company survive a supply chain problem during a pandemic?

While North America has not entered officially entered the flu season, there is much that needs to be considered by companies concerning their supply chain. When a pandemic strikes, it will be too late to start to investigate the areas of the supply chain that could impact your business, even if your staff does not become sick.

Have you looked closely at you supply chain? Do you know what material each company provides and the percentage of your raw materials that are supplied by each member of your supply chain?

If you find that a significant portion of your materials come from 1 or 2 suppliers then you may have a problem if these suppliers are impacted by a pandemic flu. You need to also identify how close these suppliers are to each other. If they are too close, they could both be affected by a regional quarantine.

You may be thinking that you could easily switch to another supplier if your primary supplier is shut down. This may not be possible. You do not know what percentage of the supplier’s production capacity is used to supply your raw material. If you are taking 30 to 40% of any one supplier’s capacity and other suppliers are operating at near capacity, then they will not have excess capacity to accept your order. Also, how long would it take to find negotiate and accept a new supplier into your supply chain? Would this new supplier accept that once your original supplier was back in production you would move your orders back to him?

So who in your supply chain is the critical supplier? Can you diversify part of you requirements to another supplier in another region? Do your agreements with your suppliers have the correct wording to ensure sufficient supplies during a disruption to the supplier’s work place?

Do your suppliers have a pandemic response plan? Do you?

Some research and checking now could save your company in the future.