CIPS has shared guidance on both short-term and long-term actions that procurement and supply chain professionals should take to deal with the impact of COVID-19 on businesses.

CIPS stated that procurement and supply chain experts must act “as a matter of urgency” to build stock of essential components and alternative sources wherever possible, to avoid shortages caused by factory shutdowns in China and national lockdowns in Italy.

They also warned that “for some businesses, it may already be too late to strategize to mitigate these impacts, as supermarket shelves are empty, production shortages are beginning to appear, and consumers are stockpiling essentials—this will exacerbate supply chain shortages.”

10 Ways to Mitigate the Impact of COVID-19:

1. Prioritize high-risk sourcing not only by region, but also by sector, product type, or business value.

2. Analyze your supply chain beyond Tier 1 suppliers to understand how other suppliers in different regions or countries are affected.

3. Review business operations with inventory in mind—build stock at your own sites to reduce the impact of shipping delays, and assess the additional cost if this is required.

4. Do not rely solely on forecasted supply or current inventory levels.

5. Calculate acceptable stock levels for “at-risk” periods to establish emergency conditions.

6. Keep open channels of communication with your key suppliers at all times.

7. Continuously seek alternative sources, including different transport routes.

8. Identify factors that provide alternative shipping routes to ports.

9. Evaluate travel plans and use digital technologies, such as remote meetings instead of face-to-face meetings.

10. Calculate potential additional costs, such as failing to deliver products to your customers.

Long-Term Actions

CIPS emphasizes that buyers and supply chain professionals play a key role in alerting companies to potential supply disruptions and offering solutions.

5 Long-Term Actions for Buyers:

1. Summarize lessons learned to highlight critical supply points that may cause future problems and develop mitigation plans.

2. Seek collaboration with organizations in your sector to develop new supply markets for suppliers that are limited or geographically constrained.

3. Diversify your sourcing to multiple suppliers across different regions.

4. Develop local production capabilities—this not only provides better visibility of your supply chain but also offers benefits such as reduced ethical risk from suppliers, enhanced sustainability, and local economic development.

5. Review contract terms to reduce future risks, e.g., assess whether force majeure clauses would apply in crisis situations.

CIPS concludes: “In facing a major global crisis such as the coronavirus pandemic, now is the time to act and protect the supply chain as much as possible.”