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  • Writer's pictureJeremy Conradie.

Impact of Covid 19 on Supply Chain

Businesses globally are reeling with the impact of the Covid 19 pandemic. Global supply chains have been disrupted to an unprecedented level, at an unprecedented rate in the first half of 2020. Especially so, given that the virus originated in China, the “factory of the world” so to speak. This has meant that the impact of the virus on supply chains has been significant. The need to design smarter, stronger and more diverse supply chains has been one of the key lessons of this crisis.

COVID-19 has exposed many of the vulnerabilities inherent in complex global supply chains built on lean manufacturing principles. It has also laid bare the inherent risks of inventory and single-sourcing models driven exclusively by cost control. When Chinese factories closed, manufacturers struggled to pivot due to a lack of flexibility in their supplier base. One likely consequence is that global firms will diversify their supply chains in the future, instead of relying only on China. Manufacturing hubs such as Vietnam, Mexico, and India are likely to benefit from that shift.

We will also see a decentralization of manufacturing capacity, with companies looking to bring production home.

What is certain, is that in this unprecedented in modern times crisis, businesses and individuals are going to have to be flexible in finding the solutions they can. And for many businesses a large part of that will be finding supplier and source flexibility, and agility to change those without completely disrupting their supply chain operations.

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