A. For many technology businesses, supply chain disruption has already meant supply shortages and increased prices, fulfilment delays and heightened transportation costs. Others are bracing for impact. Looking longer term, the extent of these and other supply chain disruptions will be dictated by the speed at which the global economy—and the Chinese economy in particular—rebounds once the outbreak is contained.
If conversations around geographic diversification in supply chains aren’t already underway following the U.S.-China trade tensions of the past year, now is the time. By shifting supply sources to a variety of countries, and minimizing the dependence on a single location, companies have more flexibility when it comes to procurement and manufacturing.
To drive collaboration and supply chain resilience, tech companies should introduce a resiliency scorecard. The objective of the scorecard is to identify gaps in risk management strategies, including within the supply chain, by evaluating current risk mitigation processes against associated goals. Supply chain resiliency strategies to consider building into a scorecard include flexible contracting, multi-sourcing, financial planning, risk pooling across parts or products, collaboration to improve forecasting and test batches.
Tech companies should also familiarize themselves with their insurance policies and understand the extent of their coverage. For COVID-19 specifically, pay close attention to whether or not insurance coverage contains a Communicable Disease Exclusion.
If possible, implementing technologies such as cargo-tracking, cloud-based GPS and RFID can help increase visibility into nearly every part of the supply chain. Real-time transparency can help companies more proactively identify specific areas of risk early on, or more quickly notice and respond to disruption that occurs.