The Covid-19 pandemic has affected almost everyone. Some sectors have had a worse time than others but there are very few who have thrived amid the chaos and have not seen the impact of Covid.
In this article, we examine the issues facing many industries and what the future holds for the global supply chain.
Importantly, the pandemic hasn’t created all the problems—it’s just revealed inefficiencies and vulnerabilities. However, the problems related to staffing shortages due to lockdowns stem from the pandemic.
How bad is the impact?
A survey conducted by Ernst & Young, one of the Big Four accounting firms, produced some interesting results. Findings from key sectors, including automotive, technology and life sciences, made it clear that the pandemic had a massive impact on supply chains, with 55 percent of supply chain executives saying Covid had a predominantly negative effect on their business, and 17 percent reporting of a clearly negative effect. Only 3 percent said the pandemic had a significant positive effect.
The life sciences sector recorded the most positive effects, as its products are classified as essential. Many others, particularly those with factory settings, saw significant disruption as staff were forced to self-isolate and the introduction of physical distancing and PPE to reduce staff exposure to Covid.
All of these disruptions have increased costs across multiple industries. Companies sourcing supplies and raw materials from overseas have endured lengthy delivery delays. It has had an impact across the board. The linked blog post shows an example of how increased costs are affecting the sanitary and electrical industries.
What can companies do?
One positive aspect of the Covid pandemic is that most companies have been forced to take a closer look at their supply chain in hopes of maximizing efficiency. This ensures that their networks are more resilient to future problems.
The E&Y survey found that companies prioritize efficiency in their supply chain and want to invest in their people to ensure they have the right skills to increase productivity. Another interesting finding is that visibility in the supply chain is also considered important. For example, companies are realizing the importance of technology in tracking global shipments, especially those that are time or temperature sensitive. Covid vaccines are a good example of a product that benefits from being tracked at every stage of the journey.
Technology is becoming increasingly important in global supply chains. The disruptions caused by Covid-19 have highlighted the importance of tracking shipments and automating processes. Many companies are already investing in technological solutions such as AI and machine learning.
Experts believe that future-proofing the supply chain against events like Covid-19 will require the shift to autonomous and digital solutions such as warehouse robots and delivery drones.
If you haven’t already, take a close look at the strategic architecture of your current supply chain and see where improvements can be made.