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Worsening congestion at China’s Yantian port
June 7, 2021

The impact of COVID-19 to the Supply Chain

Due to the COVID-19 pandemic supply chains were more vulnerable which made industries to navigate a new supply chain landscape with limited and zero predictability. Supply chains functioned on a predictable supply before the COVID-19 but when the virus outbreaks industries are now facing new environment of instability to manage and maintain.

The pandemic causes the supply for the essential items to experienced an influx of demand. With the implementation of quarantine, lockdown and self-isolation periods causes panic buying as the pandemic spread from China to Europe, USA and all regions of the world. with the virus spreading to the world the demand to increase the stocks in the stores and supermarkets has put a lot of pressure to the retailers.

A lot of industries were affected with this pandemic and fashion industry is one of them. This pandemic causes the fashion industry to close the outlets and restrict the movements of their consumer. The apparel manufacturers and retailers resorted and depended on e-commerce, nevertheless, the trucking and drivers became increasingly difficult to source.

Different modes of transportation were also affected by the pandemic. The air freight has reduced it’s capacity that caused an immense challenges for the regular transportation of goods around the world. With the limited ‘belly-hold’ capacity in the air freight, freight industries resorted to Rail freight from China to Europe, Intermodal Services and Cargo Charters is also in a influx in demand.

The challenges ahead for the Supply Chains?

As outbreaks continues and the supply chains adapted to the new environment an additional challenges has emerge. The supply chains experts are now troubled by the high consumer demand. With the businesses and store being closed down temporarily, a reduction in consumer demand may be experienced by the industries.

The future Supply Chain and how to prepare for them?

Partnership throughout the supply chain will be able to maintain an agile and visible approach to fluctuating supply and demand during this crisis. By beginning to assess your consumer demand, such as determining your current and future inventory, forecast and any influx in your supply, if we can provide a flexible logistics that would ensure your business to run effectively. The risk we might take, if we can support in a long term both now and the future. How will you build supply chain resilience into your operations should a similar pandemic reoccur?

… And the top priorities during and post COVID-19 pandemic

The top priorities to overcome Supply Chain challenges was broke down by a professor of operations, information and technology at Standford Graduate School of Business, Hau Lee. Increasing the awareness regarding what’s happening throughout the supply chain is the priority for the most large manufacturers.

  • What are the trends in trade agreements?
  • What kinds of risks — physical, political, financial — do suppliers at each level face?
  • What will be the repercussions for the rest of the chain if a key factory shuts down?
  • And what are the backup options?

Building a more flexibility into the production process (operational hedging) is the second priority to these large companies. Alternating the sources would be the right way to navigate these challenges. An increase in logistical flexibility in the third priory according by Professor Lee. Investing in logistics can significantly expand a company’s options.

Moving forward, as stated by Professor Lee, companies and manufacturers looking o overcome global Supply Chain challenges should:

  • Look for options in advance.
  • Invest in flexibility.
  • Hedge like a bank does.

Article inspired from the Craneww.com.

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