An International Risk Management Institute (IRMI) Expert Commentary by Cheri Hanes, CRIS, LEED AP, CDS discusses the problems of supply chains caused by COVID-19. Although Hanes focused on construction contractors, her analysis can be adapted for subcontractors, manufacturers and business owners, all of whom have to deal with supply chain disruption.
Supply chains can be disrupted by government mandated shutdowns, labor shortages due to illness, and price increases due to lower supplies. Hanes lists two sets of tactics for supply chain management, present and long term.
- Appoint someone to lead the supply chain management process. The person in charge should be able to see the big picture and take action as necessary.
- Communicate with subcontractors and suppliers. Topics of discussion should include
- Material status and availability.
- Potential areas of concern.
- Lead time and price impacts.
- What keeps them up at night?
- Conduct a supply chain audit.
- Mitigate potential impacts by planning for delays and need for alternatives.
- Share knowledge with owners, contractors and others involved in your business.
- Implement a materials management plan, including tracking of shipments.
- Incorporate delays into project scheduling.
- Use lessons learned in your planning.
- Use your knowledge of challenges in selecting projects to pursue.
- Work with owners, contractors and suppliers you know and trust.
- Adapt schedules to "new normal".
- Use current cost information rather than historical data.
- Review contract language (including insurance policies) to avoid problems.
- Stick to core strengths.
- Collaborate with subs and suppliers.
- In qualifying subcontractors, ask about their supply chains.
- Focus on redundancy.
- Incorporate supply chain strategies into your business continuity plan.