How The Coronavirus Has Affected The Supply Chain Industry?


The novel coronavirus disease – better known as the COVID-19 is causing great fear, panic, and inconvenience to many people worldwide. In fact, the global focus has shifted priorities for most businesses, one of which includes the logistics and supply chain industry. And as the number of cases continues to rise every day, it impacts and has indeed taken a toll on the global economy that causes constant changes in stock prices, demands, and many more.

Also, because of the coronavirus threat, many people from different countries are forced to stay indoors and practice isolation for a couple of weeks. This is to help contain and combat the virus as much as possible. Meanwhile, warehousing facilities and workers are on the frontlines, observing business as usual. Along with the rising number of people staying indoors is also the increasing need for supply chain industries to keep their systems and operations up and running. A lot of consumers now turn to online shopping with the hopes of getting their basic needs and other essentials delivered in an instant and right at their doorstep.

But frankly, the supply chain and logistics industry are having a hard time coping with the latest global changes brought about by the pandemic. The current situation has indeed taken a toll on most businesses, if not all. So, to know more about this, here’s how the coronavirus has affected the supply chain industry:

End-To-End Global Supply Chain Disruption

The current situation of the world has definitely changed, disrupted, and posed a significant threat to the end-to-end [global] supply chain system. This concerns the products consumers use almost every day. Each of these products entails a couple of elements before the finished product is taken to a consumer. It takes a journey through oceans, rails, air, and roads before delivered to a boutique. Each of these complex supply chain systems is highly important, and if one is taken out of the equation, then it will most likely impact and disrupt the entire supply chain. With COVID-19 still around, it continues to affect all channels and nodes connected to the China-centric network.

Lately, demands concerning toilet papers and alcohol have skyrocketed. But grocery store shelves are all empty because of problems with a production capacity that may also lead to time and lead constraints. The raw materials used to make and formulate tissue paper or alcohol are probably linked by a specific network. The facility where this is made might not have enough workers or truck drivers to deliver these raw materials on time into warehouses, from there, then onto the shelves. And this is what it means to actually experience an end-to-end global supply chain disruption.

Fast-Paced System And Transaction

With all the basic needs and other essential goods rising in demand, warehouses and distribution centers worldwide, like LSCR’s, are working on a fast-paced system and operations. As previously mentioned, demands keep rising, yet stocks are running low each waking day. With that, the supply chain industry is forced to scale up on operations and production to meet consumer demands on time.

Reduction In Number Of SKUs

In order to make supply chain markets more manageable these days, many retailers have already started reducing product variety. This allows both supplies and the entire supply chain ecosystem to focus and make storage space for items that are currently high in demand.

The full extent and impact of the COVID-19 are still unknown, especially for the supply chain and logistics industry. But if there is one thing certain, it’s that now is the best time to adjust and prepare for all the potential economic downpours and disruption throughout the entire supply chain ecosystem. 

Crucial factors to consider during this crisis

Despite all the ongoing operations and reassurance from suppliers and manufacturers, businesses should not ignore the fact that there will definitely be supply chain disruptions, one way or another. Therefore, it is only critical that large asset and business owners take a huge step towards responding to the current situation. How do you ask? Here are some crucial factors to consider when planning for and mitigating the impacts of the pandemic, so that startups can revamp during the corona pandemic.

Implement A Clear Forecast Of Business Requirements

You can’t afford to go all out or nothing at all these days. The current status of the world calls all businesses, especially those in the supply chain industry, to be as precise as possible. Forget about over or understocking your products, supplies, or other materials. What you should be establishing now is a clear plan and forecast of all your business needs. Make sure you always keep in check with your supplies or warehouse managers so that you are updated and notified with stock replenishment (especially for essential goods), manufacturing, backlogs, maintenance, and many more.

Enumerate Your Vulnerabilities

Being aware of all your vulnerabilities can significantly help you stay in control despite the current situation. And, two of the greatest vulnerabilities supply chain markets face today include production location and consumer match.

The location of your production strongly correlates with the availability of your workforce. Say, your warehouse is located in a place full of COVID-19 cases, then you might be having a hard time running operations. The best way to get through this dilemma? Incorporate warehouse robotics into the system. Warehouse management systems and software and other robotics greatly help keep distribution centers and manufacturing facilities up and running despite the threat of the virus because there is less to no physical contact among workers; hence, preventing contamination.

On the other hand, you could also be operating with the help of a third party manufacturer. But in the event that this manufacturer is overseas, then you might be having a problem. You see, the supply chain ecosystem is scattered all over the world. You could be selling products in one country but manufacturing them in a totally different state on the opposite side of the world. With the lockdowns and quarantine in place, businesses will be having a hard time coping and meeting production capacity and requirements. Which leads us back to square one: implement a clear forecast of business requirements—also, robotics.

Keep Your Communication Channels Open

Now more than ever, maintaining your supply chain’s flexibility is essential if you really want to lessen disruption. This is why it’s still vital that you keep your communication channels open with all your key suppliers. This will help both parties adjust to one another’s needs and requests. In turn, allowing you still to make transactions or manufacture amidst the on-going pandemic. Keeping all your communication channels open also significantly helps you make both ends meet, and who wouldn’t want that at such a time like this?

Have A Response Plan In Place

Consider making an entire response or resilience plan. Categorize each risk or problem according to severity or priority, then identify how you can mitigate each one. It helps to have your team have a say in this as they are the ones more exposed to systems and everyday operations. Some risks and problems may include but are not limited to:

  • Advance orders
  • Stock holdings
  • Changing of demand profiles
  • Building inventories
  • Stock replenishments
  • Getting an alternative or temporary supplier
  • Building inhouse

Continue Monitoring Activities And Adjust

We all know that the system is rapidly changing, along with the situation. Therefore, it’s best if you continue to actively monitor all activities under your watch and adjust accordingly. As new trends and information come to light, be ready to adapt while still having a risk response and recovery in line.

The pandemic is forcing businesses to consider how [global] supply chain behaviors are bound to change in unexpected ways. Alongside containing the virus’s impact is seeing to it that the supply chain ecosystem stays intact while depending more on innovations that could help with recovery. It’s not a matter of “how do we survive amidst the situation?” but rather, “how do we stay effective within the same industry?”

Here are some other things you can do to try and keep the supply chain ecosystem running and intact:

  • Look for alternative supply and transportation routes
  • Use digital technology
  • Reassess travel plans and package routes
  • Build inventory around stores and boutiques to reduce the impact of port delays
  • Calculate stock tolerance

Wrapping Up

Above all, one of the greatest challenges during the time of pandemic is keeping your workforce healthy. One staff who tests positive for the virus will only mean the entire facility has to go on quarantine and halt operations. This is why warehouse robotics is also an integral part of distribution centers these days as it helps reduce physical contact and contamination. Moving forward, we’d like to think that the supply chain and logistics industry will thrive even amidst the pandemic, and definitely once this is all over.

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