How COVID-19 Disrupted Supply Chain Globally?
Summary:
The impact of Covid-19 was a behemoth to the world in terms of personal lives and the economy. Millions of people suffered tragic ends of the pandemic. On the other side, economy went downhill pretty much and erased all the gains done in the past half-decade and more. The supply chain industry saw firsthand its impact of it.
This brief takes a look into the impact of pandemics on the global supply chain and measures to lessen the disruption.
Brief: How COVID-19 Disrupted Supply Chain Globally?
Introduction
The pandemic presented a different problem for the world where keeping the essential services and their supply was the first agenda of nations. The existing supply chain mechanism was fully tested in terms of resilience and flexibility. However, on a corporate and economic scale, the supply chain activities were completely held with lockdown and stricter measures. It was estimated that over 94% of Fortune 1000 companies are still suffering from supply chain disruptions due to Covid-19 while over 75% of companies have posted negative results due to it.
The Impact
The immediate lockdown and shutdown of the global economy showcased vulnerabilities in the current production and distribution strategy of the companies. The trade restrictions caused a severe shortage of essentials and just about any other commodity in the market. The world has for the best of the past couple of decades been importing goods via supply chain mechanisms from producer nations.
However, this reiterated the highlight for the home nations to rethink the strategy and structure their production and supply chain to manage the needs properly. The higher-cost home markets are a hindrance to creating a complete home production-based economy and the need for supply chain management will never cease to exist. It poses a question for nations to use their supply chain more resiliently and competitively.
The New Imperative
The pandemic provided enough food for thought to revisit the existing mechanism and focus on supply chain optimization. This can be done through various measures like digital supply networks, leveraging modern technology, 5G, artificial intelligence, and robotics. This may cause major companies to outlay extensive capital investment initially but can help build a future-proof supply chain mechanism and handle the next decade of booming economical demands.
