The global supply chains and the manufacturing sector have faced a serious setback due to the circumstances resulting from the Covid-19 pandemic. Many countries have sealed their borders as well as banned overseas flights. Let us now examine some of the related aspects of the prevalent scenario.
- The pandemic has revealed the susceptibility of the global supply chains of contemporary times.
Also, it simultaneously stressed the importance of having supply chains that include different sources, with no dependency on just a handful of entities. - Owing to the restrictions imposed on transport, there have been disruptions in many elements of supply chains leading to abnormally long delays. If the lockdowns extend for prolonged durations, the crisis will just aggravate.
- It has been projected that there is going to be a decline of more than 30% in the activity of supply chains, on a worldwide basis. This is on account of the unprecedented level of uncertainty present in global markets.
Covid’s impact on the global supply chains has thrown light on an extremely crucial facet. Countries that overly depend on only a select few global business partners have become extremely vulnerable, in the given situation.- China is the leading supplier of active pharmaceutical ingredients (API) to numerous zones. Now, with the pandemic creating havoc in this country, the API supply chains got greatly affected. The situation now demands that new supply chains not connected with China have to be developed. This could be a tough proposition for weak economies.
- Restructuring of the supply chains will hinder the activities of many players, in the foreseeable future. But with time, the companies are going to get acclimatized to the new patterns in the supply chains; this can be termed as the “new normal.”
- Because of the disturbances in the supply chains across the world, big manufacturers have started to depend on robotics, to carry out their day-to-day operations. It is predicted that there shall be a rapid increase in the number of organizations that would make use of robots, in manufacturing processes.
- The magnitude of supply chain interruptions is so severe that many businesses are compelled to invoke a particular provision of the contract law. This provision protects companies from possible legal implications when any genuinely unforeseen circumstances impede them from performing their part in a contract. And, the Corona adversity is indeed an unexpected one.
Remedial Measures
Now, it will be appropriate to briefly focus on a few remedial measures that have been suggested by many experts.
- The interactions between the suppliers and the buyers need to be digitized, as quickly as possible.
- Companies now have to contemplate in the direction of carrying out manufacturing operations indigenously. For the purpose on hand, they should rely on things such as artificial intelligence, small batch production, and automation.
- Businesses should lose no time in building predominantly local supply chains. This is going to make sure that the companies will be able to successfully withstand any future calamities.
- Organizations are now necessitated to design guidelines specific to risk management of supply chains. Here, all the potential risks must be identified and the related corrective actions should be elaborated. Responsibilities and roles have to be clearly defined, as well.