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The Corona Pandemic has caused sourcing and supply chains in many companies to stall. Dr. Knut Alicke, a partner at McKinsey & Comp explains the weaknesses of many manufacturers, and how to better guard against such crises, in an interview with Port of Hamburg Magazine editor Ralf Johanning.
POHM: Knut Alicke, Christmas is just around the corner. Are all the presents going to arrive on time?
Dr. Alicke: That’s difficult to answer. The situation in recent months has however shown that many fields are experiencing enormous bottlenecks. Whether, for example, that new car you ordered is going to be standing outside the door on time is very ques- tionable.
Why is that?
The planning in many companies has not stood up to the ongoing Corona pandemic crisis that has been with us for over a year. Many supply chains are geared to just-in-time deliveries. There’s little room for disruptions leading to bottlenecks in sourcing and
ware, the companies want especially to be faster and analyse more scenarios than before. Given this, they should be able to succeed in analysing the multi-lev- el supply chain; just how deeply, depends on which industry.
This leaves regionalization as the third pathway to a solution, creating greater independence from mul- ti-level supply chains, following the motto of ‘back to the roots’. Interestingly, many did not judge a return to the roots as being so important. That would be a structural change involving a lot of effort.
Let’s come back again to the start of the crisis. How did companies react to the suddenly emerging dif- ficulties?
Right from the start many shippers reacted correctly and set up their ‘war room’. There, they investigat-
production. Precisely this many companies.
In one investigation you surveyed 71 companies twice, to find out how they have reacted to the crisis and what con- sequences they have drawn from it, firstly in May 2020 and again in June 2021. What were the core statements the first time?
At the beginning of the
crisis, many of those ques-
tioned wanted to speed
up their processes and be-
come more agile. Digitaliz-
ing was to play a decisive
role. Moreover, they were
considering building up
stocks again and partly do-
ing away with the just-in-
time principle. In addition
they were again increas-
ingly considering regionalizing production and sourcing.
One year on, has this result changed?
In general the answers have been underlined, and are even being pursued more intensively. However, since enormous bottlenecks continue to exist, many of those surveyed are convinced of wanting to increase their inventory. And yet, in the current situation that is absolutely not possible.
How do things look on the digitalization front?
This is still the top priority. With cutting edge soft-
is what has happened to
Right from the start many shippers reacted
correctly and set up
their ‘war room’. There,
they investigated
exactly where they stood.
ed exactly where they stood. They had to de- termine what restrictions existed and what options were open to them. We then often helped in find- ing a medium-term solu- tion. But then, after four weeks, such a process is frequently not complet- ed, requiring the compa- ny to establish these pro- cesses.
How should I try to im- agine working in a ‘war room’?
Early on, there’s a lot of telephoning going on, be- cause the available IT in- frastructure doesn’t allow a comprehensive analysis of the situation. Every day, the team tries to
“
They had to determine
what restrictions existed
and what options were
open to them.
„
establish the actual stock status and deliveries, then looking for appropriate solutions.
Are these ‘war rooms’ still in use today?
Some and some not, because during the pandemic many more topics have come into question. That is why the war rooms have not been stood down up to now. In addition, there are still companies that have not even adopted this option.
That sounds like a recipe for chaos...
You could say that. However after a couple of days, a
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