The outbreak of the viral disease COVID-19 has operations disrupted worldwide. The virus has also impacted the global economy and has created an incredibly difficult business climate. With international borders being closed, the global supply chain system is about to topple. In order to survive, businesses have no other option but to reinvent and improvise their supply chain models.
If we analyze things in retrospect, it seems that the dependency on a single country to fulfill the needs for raw materials or finalized products is the biggest mistake businesses have been making. For instance, many of the world’s biggest companies, including some of the Fortune Global 500 firms, rely heavily on China. When the Chinese government enforced the lockdown in Wuhan (China’s industrialized province where the outbreak originated), businesses across the world experienced major disruptions, causing some of the organizations to temporarily halt their operations.
An Opportunity to Plan
As the quote goes, “don’t put all your eggs in one basket.” The virus has certainly exposed vulnerabilities of all those organizations who rely on just one country to fulfil their supply. As we hope that the conditions will approach normalcy soon, here are some measures companies can take to protect their supply chain systems.
*As the situation evolves every passing day, some of the perspectives in this article may fall out of date.
For companies that operate or have business relationships in the hardest hit countries, steps may include:
Preparing for Supply Chains Disruption
Natural disruptions like Tsunami or COVID-19 can happen at any time. It is important for businesses to be prepared for such unforeseeable scenarios. Decreased productivity, lack of access to staff and a considerable change in shopping practices and spending are the major challenges faced by businesses. It’s hard to figure out the full impact of coronavirus on supply chains as the situation is changing at an incredible pace.
However, supply chain leaders must come up with a long term plan to prepare for the worst.Here are some important steps supply chain managers must take: