COVID-19 Tests the Resilience and Flexibility of Jabil’s Global Supply Chain
COVID-19’s negative impact rivals any disruption of global supply chains in memory. This disruption has been bigger, lasted longer and has come in an unexpected form. It has precipitated both massive disruption within the supply chain and tremendous increases in product demand. These have occurred mostly with healthcare products, but the surge of people working remotely has also escalated demand for products that provide consumer and infrastructure access.
In many ways, the nature of healthcare challenges supply chain management. Healthcare is slow-moving and deliberate because of its direct impact on people’s lives and stringent regulatory environment, whereas supply chain management requires quick thinking and action. Since the pace of innovation in healthcare lags that of technological innovation, many solutions today rely on legacy components. These legacy components caused suppliers to restart product lines that were run infrequently, if at all.
How Jabil Helped: People, Processes and Technologies
Even before the pandemic had an impact outside of China, we pinpointed Jabil Healthcare products – such as respirators, test equipment and pulse oximeters – that would positively impact the fight against COVID-19. Anticipating a dramatic increase in demand, we collected a list of more than 5,000 components and preemptively escalated the supply base. “Dramatic increase” turned out to be an understatement.
As the situation grew, we received requests from the vast majority of ventilator companies, diagnostic equipment companies and governments to immediately scale production. Products that sold a couple thousand a year quickly ramped to selling in the millions. As an example, under the Defense Production Act, we went from manufacturing 2,000 ventilators a year to 40,000.
While these numbers sound small compared to consumer goods, healthcare often relies on supply chains that were built 10-15 years ago, which would typically render this escalating production impossible. But given the gravity of the situation, we leaned on our people, processes and resources to accommodate the demand.
First, we rallied teams across company divisions and geographical distances. Our materials management teams began to and continue to work consistently and tirelessly to capitalize on every opportunity. Team members from the U.S. to Shanghai were working around the clock to bring solutions to market. Several colleagues paused their current projects and even stepped outside their usual responsibilities to offer their time, skills and expertise. During a crisis, our mentality becomes as simple as “let’s do whatever we can to help.”
During a crisis, our mentality becomes as simple as “let’s do whatever we can to help.”
We also leveraged our well-developed supplier relationships. Our supplier partners stepped up to the challenge, giving us visibility into their inventories. They helped us track materials and components more effectively by providing us full transparency. They trust us to protect their sensitive data and use it responsibly. After all, real-time intelligence and data are the antidote to risk.
Our technology was another crucial factor to our quick response. We used Jabil InControl™ to streamline information on the bill of materials, suppliers and alternative components as well as identify customers who could support. It also helped us rewrite reports that offered fresh views of supply and demand, plan and prepare for different scenarios and close gaps in customers’ supply chain capabilities. These data systems allowed us to stay well-organized, update shortage lists in real-time and deploy a multi-sourced strategy that also included customers within our Defense and Aerospace division. Simply put, the data systems have gotten critically important products to patients more quickly.
Speed and Transparency are Essential to an Effective Response
As supply chains continue to come on- and offline based on how well COVID-19 is contained in different regions, speed and transparency are essential to responding effectively.
Supply chain success starts with speed. The best way to ramp up speed is to predict vulnerabilities and proactively work toward solutions. Our approach isn’t to identify what the next disaster will be; it is to identify the probability that the physical and financial structure of a supply chain will fail if a crisis does occur. This allows us to create contingency plans in front of a situation rather than as it’s unfolding.
Transparency is also imperative to effective supply chain management and a quick and efficient response to COVID-19. Successful supply chain management today demands real-time visibility across every aspect of the supply chain, but that can be more easily said than done. In a Jabil-sponsored survey of supply chain decision-makers, 91% stated that it is important to maintain visibility through to the original component or parts manufacturer but only 32% said they had instant visibility into supply chain intelligence and data.
91% of supply chain decision-makers say it is important to maintain visibility through to the original component or parts manufacturer but...
That is why we deploy intelligent digital supply chain solutions that leverage the cloud, real-time connectivity and advanced analytics to create a connected ecosystem. In fact, COVID-19 may prove to be a catalyst for companies to revisit their global supply chain strategy and accelerate the adoption of digital supply network models and capabilities. However, this ecosystem could not thrive without the collaboration of manufacturers and our suppliers.
In Times of Crisis, Jabil’s Supply Chain Infrastructure Offers Unique Advantages
For more than 50 years, we have been building our supplier relationships, commodity management and supply chain networks and strategies. This allows us to scale with speed. Our developed infrastructure means that we can communicate with a strategic supply base of more than 27,000 suppliers.
Like any other relationship, communication is key to a strong supplier relationship management strategy. We need to know what our customers need and where we can get materials instantaneously…or as close as possible. We also need to be able to communicate with our different locations as they work on various stages of a product. That is why we have different avenues where we can obtain the information we need, share it immediately and fulfill orders. Again, an intelligent digital supply chain provides an elevated level of visibility.
In short, several factors have helped Jabil react efficiently:
- Commodities supply chain and commodity experts in each region
- Established trusted relationships with suppliers
- Diversified manufacturing footprint
- Technology (for visibility, risk management, business continuity, etc.)
COVID-19 has disrupted global supply chains. It further twisted already-tangled global supply chains. It obstructed the world’s ability to conduct business with China, a pivotal player in global trade and primary producer of many high-value products and components. But the worst disruption a company could face would be broken collaboration. In a crisis, proven partnerships are essential for success. We’re thankful to be able to support companies in navigating these difficult times.
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