The coronavirus has disrupted supply chains around the world and continues to pose a risk for businesses in the weeks and possibly months ahead. Disruptions in product availability and manufacturing capacity are being driven by government-mandated factory closings, travel restrictions, and fear. While the level and duration of the disruption is still unknown, John Galt can help you manage its impact with our end-to-end digital supply chain solution called Atlas Planning.
Here’s How Atlas Planning Helps
When supply disruptions hit, businesses need to identify alternate sources. The Supply Chain Analytics app in Atlas Planning allows planners to create what-if scenarios for different supply alternatives. It guides you towards the best option that minimizes disruption and maximizes profit.
One Atlas customer, a consumer goods manufacturer with significant Chinese operations, has used Supply Chain Analytics to experiment with alternate sourcing and shipping routes. Supply Chain Analytics builds a complete model of the end-to-end supply chain and models the impact of changes on any planning parameter, so the manufacturer can evaluate options and find the least disruptive, most profitable alternatives. Learn more about What-If Scenarios & Scenario Analysis.
Statistical Safety Stock
The Inventory Management app in Atlas Planning calculates statistical safety stock levels to maintain customer service targets, while accounting for risks such as long lead times, forecast error, and supplier lead time variability. Machine learning within Atlas provides increasingly accurate recommendations as more data is provided. When disruptions occur, including those resulting from the coronavirus, Atlas accounts for the changes in supplier lead time variability and adjusts recommended safety stock levels accordingly.
John Galt’s Safety Stock Analysis & Simulation gives you all the tools you need to quickly optimize safety stock, reorder points, lead times, and service levels under a variety of challenging scenarios. Learn more about John Galt’s Safety Stock Analysis & Simulation.
Prescriptive Recommendations for Inventory Movements
Orders from China that have been postponed indefinitely or delayed are sending importers scrambling for alternative providers. Inventory Management in Atlas Planning helps businesses respond rapidly to disruptions in supply by delivering prescriptive recommendations that make the most of limited inventories, while suggesting potential alternative suppliers to balance cost and customer service. In the unfortunate event where no inventory is available and a stock-out is inevitable, Atlas can allocate the available inventory to customers based on any rules desired. Learn more about John Galt’s Prescriptive Analytics.
The Collaborative Planning app in Atlas Planning makes it easy for supply chain partners to share planning data including supply forecasts, capacities, orders, inventories, impacts, closures, delays, logistics, and current capabilities. This enables your business to understand potential risks resulting from the coronavirus and other disruptions, and develop effective strategies to mitigate them. One of the most powerful ways to combat the impact of threats like the coronavirus is to develop end-to-end supply-chain visibility, performance, and risk-analysis capabilities. Learn more about John Galt’s Collaborative Planning.
Why is the Coronavirus Causing Supply Disruptions?
Production Halted in Hubei Province
Last week, officals in Hubei announced that companies in the region cannot restart operations until February 21st with a handful of exceptions for businesses producing medical supplies and food. Even if the government had not announced the mandate, production would have grinded to a near halt due to worker shortages from quarantines. Quarantines are in effect for the entire city of Wuhan, the epicenter of the outbreak, but the quarantines have been expanded to other cities in the Hubei Province in recent days. Residents in these regions are been ordered to stay in their homes. It’s unclear how long the quarantines will last. Hubei is home to manufacturing operations that many U.S. companies rely on.
Travel Restrictions a Direct Hit to Transportation
More than 50 countries or territories have imposed travel restrictions to limit the spread of coronavirus. More than 20 passenger airlines have canceled all flights to and from China, with a dozen more canceling some but not all China flights. Passenger jets account for about half of all air cargo shipments globally. The travel restrictions are forcing Chinese businesses to rely more heavily on dedicated air freight haulers. But these planes, too, have seen a reduction in flights to protect pilots by avoiding final overnight stops in China.
Concerns about contracting the virus, whether rational or not, are influencing consumer behavior and business decisions. For example, consumers across Asia are staying in their homes and avoiding public shopping areas such as malls, markets, and restaurants. More than two dozen conferences and trade shows have been cancelled across Asia. In Barcelona, Spain, organizers cancelled the Mobile World Congress after prominent participants decided not to attend over safety concerns.
About John Galt Solutions
More than ever, companies must be able to sense and respond to the dynamics of a complex supply chain. John Galt's Atlas Planning is a unified end-to-end supply chain planning platform that helps you increase forecast accuracy, optimize inventory levels and maximize supply chain performance. Since its founding in 1996, John Galt Solutions has built a proven track record of providing affordable, automated demand and inventory management services for consumer-driven supply chains. We have an unmatched ability to configure tailored solutions for customers, regardless of size, industry, or business challenge, that save both time and money by compressing implementation periods and delivering intelligent information that positively impact your bottom line.