How Data Analytics Can Help Solve Supply Chain Pandemic Woes

What’s happening is complex, and it’s due in part to sudden changes in demand for some items and a sudden drop in demand for others. Adding to the complexity is a lack of some sources of material to provide supplies at the normal level; then there’s a lack of transport for some types of materials.

All three major parts of a supply chain must be operating normally for products to be delivered in the quantity needed when they’re needed. This is especially crucial for just-in-time supply chains in which raw materials or components arrive just when they’re needed–a practice that has grown in popularity over the years and which ensures that companies don’t have to stock large inventories of supplies, which is expensive. But the lack of such inventories means that a disruption in the supply chain can create further disruptions down the line.

“We’ve seen a product mix impact,” explained David Cahn, director of global marketing at Elemica, operators of a global digital supply network for manufacturers. Cahn said that he’s seeing spikes in demand specifically due to the coronavirus. “We’re seeing spikes in certain products and chemicals that are going into protective masks and equipment.”

But that’s only part of the problem. Cahn said that excess oil inventory is being held on ships that would otherwise be used for other types of petroleum cargo. Other excess oil products are being held on container ships that would otherwise be used for other ocean freight.

“Many of our raw material ingredients are being impacted, because many of those raw materials come out of China, and they’re stuck in China,” he said. While the coronavirus impact is lessening in China, it will be a while before suppliers get back to full capacity. Worse, because of the current trade war between the U.S. and China, some badly needed supplies, such as the cotton for nasal and throat swabs, cannot be sourced from there, disrupting that part of the supply chain.

“We’ve never seen anything like this in terms of threats to the supply chains,” said Jim Yarbrough, global intelligence program manager for the British Standards Institution. “Problems vary depending on the business. In the earlier weeks it was along the lines of which factories are open and available, mostly in China and neighboring countries.”

Then the problem became one of transportation. “All of a sudden there are long lines of trucks at borders,” Yarbrough said. “There’s so much scrutiny that lines are 4 to 5 kilometers long.”

Adding to the issues are new types of cargo theft. Yarbrough said that items such as hand sanitizer and toilet paper are now hot items for criminal activity. This produces new issues for the supply chain, both in terms of lost products, and in terms of extra personnel needed to protect the supply chain.

At the end of the supply chain there’s demand. Under normal circumstances there are ways to manage demand to make the supply chain perform as it should.