Leadership Case Study:
Crisis Leadership During Global Supply Shortages
Initial Situation
- Growing risk to revenue, customer relationships and management credibility.
- Severe shortages of key components due to the global semiconductor crisis
- Overloaded customer order backlog
- Rapid rise in risk of unfulfillable delivery commitments
- Inventory increase due to customer pushouts & cancellations
- Unreliable customer forecasts; risk of duplicate or inflated orders
- Cash flow pressure from growing inventory levels
Executive Approach
Executive Crisis Management Framework
1. Backlog & Forecast Screening
- Systematic assessment and prioritization of open customer orders
- Close coordination with customers to identify and eliminate non-committed demand.
- Clear communication of “No Cancel / No Reschedule” (NCNR) terms
2. Shortage Steering & Escalation Process
- Established executive shortage steering process („Shortage Board“)
- Leveraged global supplier contacts
- Structured evaluation of lead times and confirmed quantities
3. KPI-Based Management & Early Warning Systems
- Developed and launched a backlog dashboard
- Integrated metrics: On-Time Delivery, Purchase order backlog status, Customer requested vs confirmed date ratios
- Defined escalation levels
4. Tight Collaboration with Sales & Customers
- Weekly joint risk reviews with key customers
- Regular analysis of inventory KPIs
- Introduced a “Demand Transparency Framework”
Results & Impact
The result was improved operational control, greater transparency and a structured decision-making framework during a period of severe supply disruption.
- Reduced purchase order backlog
- Improved availability for prioritized components
- Restored transparency and credibility with both customers and suppliers
- Established a lasting early warning system
- Defined a scalable escalation process
Leadership Principle
The objective was not simply to allocate scarce supply.
The objective was to create transparency, enable better decisions and maintain trust during a period of exceptional uncertainty.
