Originating from Wuhan, China, Covid-19 also known as Coronavirus in a very short instance became a global pandemic grasping the whole world into its grasp and causing a series of cause and effects around the globe. As each day passes by the repercussions of Covid-19 has far more worse effects than which was forecasted stemming the growth of day to day business. As per a survey conducted by Time magazine it reported that 25 Million people could lose their jobs and a total of 3.4 Trillion in income this year due to the pandemic. Most of the affected business are Sales department which has been affected almost 37% and next comes Production department with 27% and the third most effected industry due to the global pandemic is Supply chain with 16%.
Due to quarantine efforts to flatten the curve, A nationwide lockdown is strict in action across the globe due to which many business have problems regarding procurement, Import-export and Transport industries are majorly affected which result in whole supply chain link to deteriorate crumbling down to base levels with many of the factories and industries in total closure or partial. Institute of Supply Chain Management conducted a survey which stated that 75% of the companies stated that Covid-19 had disrupted their supply chain in one way or another and which has expected to rise upon further coming days. From a personnel experience I ordered a bulk quantity of Surgical mask from China, a normal day to day life would have resulted in 15-20 days procurement time delayed to 60-80 days which was a big difference causing a loss of time and prices surging to maximum limits.
Challenges faced in Supply Chain due to Covid-19.
There were multiple economics shock due to supply chain management was affected, the first was the supply shock, these were the scarcity of available of goods and disruption in supply of raw material and finished goods from china and around the globe, as China being the de-facto of the world most nations rely on raw materials from china and now due to this supply shock it was in jeopardy. This highlighted the fact the most of the firm around globe which included 200 of the fortune global 500 have a presence in Wuhan, China and highly relied on province for the raw materials and finished goods, The companies mostly relied on Tier 1 (direct) and Tier 2 (secondary) goods and it will be long before normalcy can be continued so hence the companies are adapting to new key functionality keeping up with the demand.one another important factor to be highlighted is that due to restriction in transportation and flight operation are in halt procurement of goods have become insanely difficult in these time of crises which have effected the supply chain system as a whole.
The second in line is the Demand shock, as the fear among nations increased a systematic demand shock which was completely new had soared the supply chain management in a experience and the crises deepened, due to shortage of supply mostly people panicked and started to stock up, an example was of toilet papers in the west. Where people began to stock of toilet papers in a large bulk quantity in their homes causing demand shocks which was way different than normalcy, Rationing was needed in these dire situation but the response from people was different and they began to stock and there was a massive spike in demand, due to exceptional efforts from supply chain professionals a model was created to counter affect these demands and there was a scramble to redirect inventories and prioritizing goods and maximum production with use of full capacity.
The last but not the least is Aftershocks of Covid-19, A phenomenon known as Bullwhip affect will take into consideration in these situation, A bullwhip affect is spike in demand which tends to amplify as we move up the supply chain, that is a small increase in demand in consumer level might have a large increase in production at manufacturer level, resulting in over stock of some goods and this affect will strike now leading the economy in shambles. One of the key components it will take into effect is due to lack of stability and visibility of nature of demand the supply chain has not seen the end of manual interventions in supply processes, however. With such an unprecedented demand spike polluting these moving averages, supply chain planners will have to modify supply quantities manually and scramble to adjust their planning systems.
New Opportunities in Supply Chain Management
For Supply Chain Management innovation merchants, this is the ideal opportunity to put development and business process change at the upfront of the discussion. Client associations need to perceive how Supply Chain Management arrangements can all the more likely set them up for request vacillations, macroeconomic shakiness, and testing conditions. Flexible Chain Management can likewise bolster endeavor arranging and the executives past the gracefully chain and make a strong however coordinated creation model that can ascend to present and future difficulties.
From the many lessons we learned due to this pandemic the first and foremost is the much needed reduction in physical labor for distribution and transport system, using technology as the utmost reliability at the our door step using of man less drones to deliver products and AI self-driving vehicles to transport goods from within cities which will further help in social distancing of people and flatten the curve. Industries which can increase production and shift lines due to demand changes, will be the norm of the future. That would be backed up by demand of communicating intelligently with one another, compounding their effectiveness and agility. Businesses are going to pay a lot of attention to making critical systems available on the cloud so that they can be remotely accessed by employees as they work from home.