COVID-19 Blog Series Part 3 – Lessons From the Front Lines

The COVID-19 pandemic has undoubtedly brought businesses new challenges and obstacles to overcome. In this series, we want to provide details from the front-lines and how listening early to the warning signs proved to be effective.

By early 2020, our US teams began to hear the stories about what we now call COVID-19. Our team in China continued to feed us intelligence on the situation and how their business was handling the COVID-19 crisis. Their information proved to be vital for our US teams, as we began to understand the potential threat. Our sourcing and supply chain teams began to ramp up their meeting sessions, asking the key questions. Where are we at? Can we get critical supplies from suppliers outside of China? What is our capability to ship needed components to our other global locations? When does it look like things will open up again?

As this virus continued to spread across the world, there are several actions various countries took to prevent the spread of COVID-19.

1.) Imposing early restrictions. This has proven to be the most effective means of containing the spread of the virus within a country. Restrictions progressively tend to increase in the following steps:

• Ban or restriction on people travel from abroad INTO a country
• Ban on Air travel and International visa
• Ban on Public transportation systems
• Ban on Public spaces – sports venues, concerts, weddings, bars, Dine-in restaurants
• Ban or restriction on people travel from Province/state to another Province/state
• Ban on supply chain activities – container traffic, goods trains, trucks – Ports, Rail and road transportation were brought to a screeching halt or slowed down considerably

Some of the Best-In-Class responses in this category with early restrictions were seen in Taiwan, New Zealand, Iceland and other Scandinavian countries (except Sweden) as well as African countries like Madagascar as best practitioners in this area.

While these countries demonstrated their ability to effectively apply restrictions to prevent the spread of COVID-19, they also increased their medical preparations.

2.) Medical Facilities Preparation

• Develop or Procure testing kits – Secure for large scale testing
• Ban or stop on non-essential medical activities and surgeries leaving hospitals and medical personnel open to deal with COVID patient influx
• Contact Tracing – Training and deploying technology and people resources to enable contact tracing for patients impacted with COVID-19 disease.

Korea, Singapore, China (little late), Iceland and other countries proactively worked on “hoarding” a lot of kits, PPE supplies and prepared hospital systems and staff to deal with the rapid increase in COVID-19 cases and they were limit the spread of disease as well as drastically low death rates.

COVID-19 – In China

Our team in Ohio, first heard about some of the Chinese cities’ lockdown during our supply chain and quality blitzes during the week of January 20^th BEFORE our team went on Chinese New Year holidays. One of the biggest impacts noted, was on our planned global quality summit during February week 3, right after Chinese New Year. Our quality team was the first to notice that representatives from India, Mexico, US, and Poland SHOULD NOT travel to China – we decided promptly to cancel all of those travel plans.

The virus was rapidly spreading, and several cities were being quarantined and under lockdown, but not until January 29^th, 2020. As cities and provinces were brought under lockdown our teams in the US, Poland, and Mexico had begun to identify the “red parts”. We also started to ramp-up orders in India, Vietnam, and Mexico for all parts co-sourced in China in preparation for China being shut down for 3 to 4 weeks. We planned for several shipments of goods immediately after the Chinese New Year, which so those inventories were expected to be delayed to 4 weeks.

Our team members in China started working from home February 7^th and we proceeded to give them all necessary information required to help prioritize key initiatives such as which parts, what levels of inventory, what new projects, which containers, which suppliers, etc. – all of this was shared in minute detail to make sure that our local supply chain was focused on key priority components and projects. Our team had anticipated that supply chain infrastructure as well as our supplier’s resources will be constrained so we helped them focus on a few important priorities.

China, however, exceeded their expectation in how quickly they opened and improved their flow of goods. Our original plan was for offices to open February 7^th with delays expected to be for 21^st or even 28^th. Our team’s main goals were:

1. First to have our parts being made by our suppliers
2. First to have our parts on trucks to the ports
3. Ensure first bookings on first few container ships leaving for US

We received the permit to open our office on February 16^th, which was one of the first permits offered in the Ningbo area. Our China team was required, to wear N95 masks available along with a good supply of sanitizing products and gloves. Since PPE materials were not available in China, we shipped them supplies from our US, India, and Japan offices to help them get enough supplies to start working in full capacity. We were able to move 4 containers during the week of February 16^th and 6 containers during the week of February 23^rd on the first few containers shipped to US and Mexico. Our engaged team did a fabulous job in ensuring the smooth supply chain for our customers.

Vietnam also displayed a very proactive response to the virus with border restrictions imposed by the middle of January. By January 31^st, Vietnam had a steering committee formed (almost in line with China’s shutting down of provinces) along with mass mobilization of military, public security forces, health care system, and public employees. Vietnam suppliers started with limited capacity almost in line with China’s timeline around the 3^rd week of February. They were almost 70-80% production capacity by March 1^st week, strikingly similar to China’s timeline. Our resources in Vietnam did similar work like China moving our shipments early as soon as ports were operational.

The virus story has proven to be a forever moving story with new disruptions declared every few days. Keys to our team’s success has been to have clear communication with sourcing teams in those countries, giving clear priorities and delegated responsibilities to keep our goods moving. They could change domestic bookings, hire local trucking companies, receive special permits as necessary, hire union employees at container yards, pay deposits to reserve space in containers and pay the higher spot rates for trucking. This closely aligned teamwork with over-communication has allowed us to keep our goods moving and supply chain pipelines filled with goods to keep our customer lines running at over 96% On-Time delivery. Our team anticipates that this type of volatility, disruptions, and changes will continue to happen for the next few months until the vaccine is found. Still, we will stay engaged, alert, and decisive to keep our supply chain moving.