Sourcing strategy and supply chain operations in times of uncertainty: how to cope with situations such as the COVID-19 pandemic
Jan. 15, 2021
The COVID-19 pandemic has created major challenges in terms of sourcing and supply chain management. Dealing with rapidly changing circumstances in the countries where our products are produced has become an important part of our daily activities. For our production facilities and those of our production partners, the pandemic has resulted in (partial) lockdowns and/or in taking appropriate measures to ensure the safety of production employees. Simultaneously, they have had to deal with border restrictions for goods and people movement and public transportation issues. Serious challenges are also visible when we look at the supply and logistics of raw materials and the shipment of finished goods. Altogether, COVID-19 is having a great impact on the entire supply chain.
Although the cumulative effects of the pandemic are difficult to predict and are therefore mostly beyond our control, there are a couple of aspects in our sourcing strategy and supply chain operations that allow us to secure our supplies and services in the best way possible.
Geographical production spread
Our own production facilities for FIBCs are based in Bangladesh and South Africa, and our production partners are based in several countries in Asia and Europe. Because we have a good overview of the entire supply chain, we are able to achieve a balanced spread between the different production locations. This means that we are flexible in terms of allocating production volumes in case of sudden drops in production capacity or lockdowns in specific parts of the world.
Long term partnerships
Committed, reliable and loyal: these three core values define who we are, how we work and how we treat our stakeholders. The average length of time that we have maintained partnerships with our production partners is 25 years. These long-standing relationships are built on mutual trust, maintained high quality of products and interdependency. Besides this commitment towards each other, we have also been able to integrate our supply chain activities with our partners. What it comes down to is that we have the right corporate structure and the best relationships in place to secure the supply of your products in the best way possible.
Safety stock
When external circumstances lead to fluctuations or an increase in lead times, safety stock can be crucial to ensure product availability. To prevent our customers from running out of bags or for them to have to source them at an increased price, we can keep a dedicated safety stock at our local warehouses.
Close customer contact
Being accessible and available for customers is very important under normal circumstances and even more so during this COVID-19 pandemic. Because the global situation is currently in a continuous state of change, we constantly keep our customers up-to-date on any changes in product availability, lead times and available alternatives. This way, we are always near. We have implemented the right online solutions to allow our colleagues to work from home without any external disruptions, while maintaining availability and access to critical systems.
Logistics
When a situation such as the COVID-19 pandemic leads to severe disruptions in the global logistics chain, this affects all of us. Effects such as sharply increasing sea freight rates and container shortages are unfortunately beyond our control. We do our utmost to mitigate this situation, and our centralised container planning process helps us to maintain overview. It allows us to optimise container loads at our trusted production locations and facilitates us to ship our goods in the best and fastest possible way. All local LC Packaging offices have access to container planning and shipment information, which enables us to keep customers up-to-date about the status of their orders.
Altogether, all of the above factors show that we are equipped, as best as is possible, to serve our customers, in the best way as is possible, during crisis situations. This way, we aim to be our customers’ Committed, Reliable & Loyal partner in packaging!