Weathering the Storm – Supply Chain Management during Global Pandemic
With 2020 now behind us, I often think of the past 12 months with mixed emotions. Last year was filled with incredible challenges that were presented to our organization in many different shapes and forms. General ability to secure supply, sustain quality, develop and launch new products and simply remain in a position to continue adding value to our customers was very much impacted by things that for the most part were not under our control. This was perhaps the biggest interruption of global supply chains we have witnessed in our lifetimes and it has affected every single person and every single organization.
However, I also think that these global challenges represented an incredible opportunity to learn even more about the complexities, fragility, and sustainability of our supply chains. Perhaps even more importantly, this was a great opportunity to learn how to adapt, plan, diversify and succeed in extremely challenging environments.
Dawar Technologies was founded in 1883 as a commercial printer but our technology focus has evolved over time from screen printing, membrane switches, and smart cards to resistive and projective capacitive touch sensors, touch monitors, and finally fully integrated touch screen solutions servicing industrial and medical markets. It is fair to say that concept of perpetual change is not foreign to our organization.
Challenges presented by the global pandemic of 2020 were some of the biggest challenges our organization has faced since the very beginning, yet we were able to come out of this year stronger and better positioned for future growth.
Below are 5 things we have learned during the Global Pandemic that helped us succeed:
Dawar Technologies' manufacturing and supply chain is made from the mix of internal manufacturing and outsourced supply chain solutions. During the COVID-19 outbreak in Asia and even later in the year, our manufacturing partners have been immediately impacted by facility shutdowns, workforce shortages, and material supplier delivery issues. Deliveries and orders, we thought we had already booked and secured, were all of the sudden delayed or even canceled. Once the factories re-opened, we ended up having a very large backlog of orders and projects with unclear status updates. This has caused a very intense need for factual, clear, and fast information sharing between us and our suppliers and manufacturing partners. Daily update calls, late-night chats were all necessary to keep the supply chain going. This extraordinary situation has resulted in an elevated quality and frequency of communication with our partners which stayed in effect until now. This has also triggered some process improvement opportunities initiatives for us as well as our suppliers which created additional efficiencies.
Effectiveness and clarity of daily communication between customer and supplier are paramount for success for any supply chain but especially for a supply chain in an offshore manufacturing model with time zone, language, and other barriers. Think about ways of how to improve the communication with your supplier from a systematic perspective as well as tactical communication issues starting with the effectiveness of your daily email interaction with your supplier. The golden rule that any topic resulted in more than 3 emails is probably more appropriate to discuss in a meeting or a call is still very much valid. Add to that time lag between different continents and you can potentially have massive delays on projects and deliveries just because two parties do not really understand the real message in an email they have received. One good habit is to request confirmation from your partners that they have received a note and understood it correctly. Task/message confirmation is a very simple and effective tool to keep your communication effective and clear.
Be Proactive and Reactive
I was reading about the first reports of the pandemic outbreaks while traveling home from my regular January visit to our Asian manufacturing partners. At that time, nobody was able to predict what the actual state of the global economy will be in 2020 and we did not have an option to act proactively to minimize the impact on our businesses. By the time CNY started, we were all in a full reactive mode with uncertainty rapidly becoming the overarching element in every single aspect of supply chain management. Starting from demand planning and forecasting, order management, inventory management, supplier quality, logistics, and transportation management, it felt like every single transaction had to be managed carefully and independently until completed. This resulted in many long days and nights, frustrating phone and video calls, and undeniably high-stress levels with our team members that were struggling with their bandwidth and ability to cope with ever-growing daily task lists. However, amid that reactive daily task overload, we had to start thinking of what our future supply chain will look like, finalize new contingency plans, proceed with new partner selection and qualification, and set up a supply chain strategy that will be more flexible, sustainable and able to support product roadmap that has grown and further diversified during the global pandemic crisis. This also meant that we had to operate in both, reactive and proactive manner which is sometimes very challenging for many team members. There is an additional level of motivation and support required to ensure that teams are able to perform at the highest level in an environment like that. Sometimes the crisis itself is that additional motivation and teams are able to rally just because they understand and appreciate the severity of the situation. However, sometimes leaders are required to find a different way to motivate their teams to march towards the same goal. Modern-day supply chain leaders must have this ability to focus on the future, recognize the required changes, set up the framework that can support the business in a sustainable way, and swiftly execute on that plan. They have to be able to do all of that while managing everyday fire drills with orders, suppliers, and customers. This flexibility and ability to keep the focus on the future is critical for success not just in supply chain organization but also in the entire business.
Think about your team and their ability to operate under high stress in unforeseen circumstances. Do they have everything they need to be successful? Do they need any support from you or your organization? Do you have a plan for the future that will clearly outline your supply chain strategy and that can support critical business goals? Keep in mind, the business survival is very much dependent on clear goals that are communicated and executed in a very concise and effective way. Achieving these goals is not always easy and sometimes takes time. However, the transitional period can’t take too long and can’t be exclusive of everyday tasks and tactical priorities we all have to deal with.
I believe that history has already given us many lessons related to the importance of diversification. Not just in supply chain, but also with product development, technology, overall business management, having options is critical. Specifically, during the COVID-19 pandemic, many of our dear suppliers and customers have faced very hard times due to a lack of diversification. It is safe to say that many businesses have started 2020 without Business Continuity and Disaster Recovery Plan in place. Also, many businesses didn’t have any contingency plans related to their supply chain. One of the biggest impacts of the 2020 crisis is that businesses are now treating contingency planning with elevated importance. Initiatives like dual sourcing, qualifying additional suppliers, safety stock planning, the introduction of new sourcing and manufacturing markets, and different geographies are all critical activities that every organization must think about and implement as soon as possible. Organizations without these contingency plans in place will find themselves in a very tough situation and will have a hard time competing and even survive. Furthermore, these contingency plans should be discussed, designed, and developed in collaboration with your customers. Understanding your customer’s goals, priorities, and their own corporate guidelines and initiatives will be of crucial importance in the process of development of your own contingency plans. Some customers will need your extra help to be motivated to think about these initiatives but nevertheless, this is an important initiative that must be on the top of everybody’s priority list.
Detailed knowledge of current market conditions in different sourcing and manufacturing markets, geopolitical factors, and overall industry trends is also a key competitive advantage that companies should use when promoting their products and services. Also, having qualified sustainable options for sourcing and manufacturing in different geographies is becoming more and more important and a key component of sustainable supply chain strategy. This initiative is not going away and we are seeing more and more customers looking for these options even if that means it will come at the cost of slightly increased COGS.
Does your organization have Business Continuity and Disaster Recovery Plan in place? Do you have dual sourcing strategies in place and most importantly, how diverse is your supplier community? Diversification in this context doesn’t mean necessarily just adding more suppliers to your Approved Supplier List, but also takes into consideration geopolitical aspects as well as the ability to quickly transition your manufacturing from one location to another at minimum to no impact to your customer.
From the very beginning of my career, I was very much guided by the idea that supply chain excellence is very much dependent on strength of the partnerships you are able to create with your suppliers or supply chain partners. For this reason, I have spent a significant amount of my time building strong relationships with our factories and suppliers that benefited greatly the overall strength of the supply chain solutions I was part of. More specifically, I am absolutely convinced that our suppliers are much more than just organizations that provide us with materials, products, or services. They are our partners, deeply embedded in the process of value creation for our customers and ultimately end consumers. Our role in the overall value chain would not be possible without a strong contribution from our partners. The way how we manage our partners on daily basis needs to be reflective of that concept, based on mutual respect, trust, and support.
Supplier selection at Dawar Technologies is a very refined process and consists of multiple steps and phases that include commercial, ethical and social evaluation as well as a more detailed audit of technical capability, manufacturing processes, and quality systems. We spend a significant amount of time on this process with the end goal to ensure that all of our potential suppliers are a good fit for our requirements. The process is designed to ensure that suppliers are not just capable of making products or performing services as required, but also that they are capable of becoming our long-term partners. Having a direct relationship with the Supplier’s Executive Team is one of the requirements that are extremely important to us and is just one of the building blocks for a successful and long term partnership. Understanding their goals, strengths, and challenges is extremely important to align your expectations as well as actions to take to ensure this is in fact a mutually beneficial partnership. A successful partnership is not measured only in the growth of YOY volumes. It is also measured in a level of trust and confidence on both sides of this alliance. This is achieved over time and it starts first with implementing, managing, and succeeding in traditional supply chain and quality metrics. However, equally important, it is also achieved with ongoing management of relationships in form of constant open, and honest communication and collaboration.
During the early stages of the COVID-19 outbreak, our manufacturing partners were able to satisfy and fully implement all mandatory requirements for production restart in record time. Following their own disaster recovery and business continuity plans and in collaboration with local and regional governments they were able to re-open manufacturing facilities very quickly, commence with production and start filling ever-growing customer demand. Meanwhile, some competitors were still struggling to understand what the process of re-opening the factory looks like and how to manage it. Our Suppliers Management Teams started maintaining very frequent and close communication with Dawar Teams to ensure allocation, prioritization, and project management milestones are being managed to customer requirements. It was their Operational Readiness, Quality Systems, Business Continuity Plans, and their Partnerships with tier 2 suppliers, logistics providers, and other partners that were crucial in succeeding to re-start their production lines in record time.
These are also key elements we look for during our Supplier Selection process at Dawar. They are being carefully reviewed by Dawar Supply Chain and Quality Teams during the Supplier Selection process and evaluated before a Supplier is added to the Approved Supplier List.
Dawar Technologies offers a wide range of capabilities, products, and services. We partner up with a highly capable, meticulously qualified, and selected supplier base located in many different geographic regions. This gives our customers flexibility, reliability, and supply chain continuity that is desperately needed in the current environment
Provide additional value/Diversify
With millions of businesses being shut down temporarily or permanently due to COVID regulations business environment is now more competitive than ever. Companies are trying to find a better way to serve customer needs which sometimes also means deviating from the standard product or service offerings and expanding their capabilities. This is obviously not an easy task even during “normal” times, let alone during the global pandemic, trade restrictions, and most of all, times of greatest uncertainty such as last year. However, it is exactly these times and tough circumstances that should motivate businesses to become more creative and look for an opportunity for additional value, diversification, and offering new product or service portfolios and business solutions. The whole concept is very simple – companies need to continue providing more value to customers and in times where your standard solutions are either being commoditized or its demand diminished due to global market trends the need for diversification is even greater.
Dawar Technologies has taken this initiative very seriously. Last year we have invested a significant amount of time and effort in exploring new technologies, products, and solutions that would complement our existing product portfolio. We have launched a whole suite of medical-grade touch monitors and All In One open frame solutions that come in 4 different sizes. We have also launched a universal Stylus that can be used on resistive as well as PCAP touch screens. In addition to that, we have also announced partnerships with strategic partners such as Kastus for antimicrobial coating solutions that can be used to protect touch solutions against both, Bacteria and Viruses, including Human Coronavirus. We are also working on Hepatic, Eye Tracking, and Hover Touch technologies that are currently generating great interest with our customer base.
These initiatives keep us current and solidify Dawar Technologies as an important player in our industry. With these new technologies, products, and business solutions, we are adding value for our customers and hopefully providing solutions that deliver a significant benefit for end-user in the medical, industrial, or consumer field. Now more than ever it is important to invest in new technologies and work with customers to understand what solutions are relevant for their applications.
In conclusion, we all agree that developments from last year presented probably the largest supply chain interruption ever. We probably also all agree that this was a good opportunity to re-calibrate and focus on the most important initiatives that will help your business continue delivering value to customers. However, the critical question is how to achieve that transition and how do you guide your supply chain organization through the storm that was presented in 2020.
Dawar Technologies has done that pretty successfully by improved communication with our partners which helps us build even stronger partnerships that are critical for future success. We have found a way to operate in reactive and proactive ways and implement some critical processes such as Disaster Recovery and Business Continuation Plans that are proven to be extremely important in the current environment. We have also expanded our supply base to include new partners in different geographies such as South Korea, Taiwan, and India. This will provide our customers with flexibility and supply chain continuity that is critical for many reasons. We have also successfully launched new products, anti-microbial, anti-viral, and other technologies and solutions that complement greatly our standard product line. All of these initiatives have helped our organization to be prepared for ongoing challenges in the current environment and positioned Dawar Technologies very well for future growth. We are very proud of the hard work and great results achieved by our team and grateful for ongoing support from our suppliers and partners.
I hope that events from last year have inspired you to conduct a more in-depth evaluation of your supply chain strengths and weaknesses that will help you guide your supply chain organization in the right direction. Hopefully, this article was helpful with providing insights into efficient ways of positioning your organization for future growth during tough circumstances.
In the words of Haruki Murakami, one of my favorite authors: “When you come out of the storm, you won't be the same person that walked in. That's what the storm is all about.”
To learn more about Dawar Technologies please visit our website: www.dawar.com
Vice President, Global Supply Chain, and Quality