AT&T hardens supply chain in face of Covid-19 pandemic

AT&T re-works its supply chains in the face of tariffs and the Covid-19 pandemic, which includes machine learning to better predict the impact of global events. (AT&T)

In the face of Covid-19, global tariffs and trade restrictions, AT&T's supply chain has weathered the storm over the past several years.

While some vendors, such as Cisco, saw their supply chains adversely impacted by tariffs on China and the onset of the Covid-19 pandemic, AT&T re-worked its supply chain.  AT&T spent more than $70 billion last year on goods and services around the globe through its global supply chain organization. 

"For us, the impact of the pandemic has been minimal – we have worked with our approximately 20,000 suppliers well in advance to ensure we have a geographically diverse and resilient supply chain to reduce our risk in just such unforeseen situations," said AT&T's Susan A. Johnson, executive vice president for global connections and supply chain, in a blog post.

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Johnson said the tariffs two years ago on goods, such as handsets, network routers and power supplies, originating from China moved AT&T's suppliers to diversify their manufacturing footprints across other countries while reducing their reliance on products from a single country.

That led to billions of dollars in spend shifting from China to the U.S. and other countries such as Mexico, Taiwan and Vietnam.

"Then the pandemic forced multiple countries where we source products, such as India and Mexico, to shut down, forcing additional re-balancing," according to Johnson. "To meet these challenges, we’re enhancing our capabilities to be able to proactively respond and manage risks from impacting global events through improved intelligence into the impact on our suppliers and knowing in advance through extensive data collection where our suppliers – and their suppliers – are concentrating their manufacturing of key products & components."

Over the next five years, Johnson said machine learning will make real-time intelligence more predictive in order to streamline supply chain operations, drive down costs and make the move from "reactive" to "proactive" when it comes to predicting the impact of global events.

Over the same time period, Johnson said there's an urgent push underway to improve supply chain technologies while boosting end-to-end capabilities.

With customers shifting from shopping at brick and mortar stores to shopping online, there's also an increased need for reorganization and inventory storage closer to the end customers, which also impacts supply chains.

"We’ll need to continually assess and optimize our distribution footprint due to shifts in consumer preferences," Johnson said.

AT&T is also focused on dual sourcing of products and raw materials, increased inventory of critical products, more near-shoring and regionalized supply chains. 

Over the past several decades, Johnson said global supply chains have been pushed to the lowest possible costs, but that led to an over-concentration of suppliers in some regions.

"We’re certainly better prepared to get through the continuing COVD-19 pandemic and the next crisis; maybe supply chain will even become invisible again," Johnson said. "But the 'next normal' is here to stay."

RELATED: AT&T tallies impact of the Covid-19 pandemic over the past six months

During the pandemic, AT&T sent 130,000 of its 243,000 employees to work from home and shifted retail resources from in-store to online. AT&T still had to provide safety measures for 90,000 front-line employees, which has taken more than five million pounds of personal protection equipment (PPE) including:

• More than five million face masks

• Nine million pairs of sanitary gloves

• More than three million bottles of hand sanitizer 

• More than 50,000 spray bottles of disinfectant 

"Some of our smaller diverse suppliers have help us meet the challenges of COVID-19," Johnson said. "For example, a disabled veteran-owned business in Indiana is providing 135,000 gallons of hand sanitizer and a minority-owned business in California is helping us distribute PPE through their extensive global network."