COVID-19 and Unique Supply Chain Disruptions

Supply chain coronavirus

For as long as supply chains have existed, so too have there been disruptions. Natural disasters, including tornadoes, earthquakes, and floods, along with financial crises, have the power to completely shut down supply chains for indeterminate periods of time. Over the past few months, however, the recent coronavirus outbreak has proved to be completely novel in the way it impacts the modern distribution of the world. Two main important distinctions set this recent outbreak apart from other major events of the past.

 

Duration:

For most other disasters or events, the relief period is limited, or at the very least predictable. Although it may be expensive and resource intensive to repair after an earthquake or hurricane, businesses can expect operations to return to normalcy after a set period of time. This allows them to make calculated decisions about their supply chains, including whether to relocate or whether to absorb the loss. In the event of the pandemic, however, this is not possible. Though some countries are recovering and reopening, others are still shut down for the foreseeable future. In addition, there is no set date for when this pandemic will be over and the world can return to normalcy, as even the development of a vaccine is nebulous. As such, business owners and supply chain managers are left to speculate with no firm data. 

 

Scope:

One option that is usually available to most supply chain managers is to relocate production or sourcing. If a location becomes unstable, both due to political or environmental challenges, relocating can be a smart move. While this may sometimes not be feasible, the recent pandemic has made this completely unviable. Some countries are less affected than others, but the pandemic has now made global impacts. As a result, relocating to avoid this problem is not possible. This offers a unique challenge to supply chain managers, as now they are forced to work around the limitations of the lockdown and workplace limitations.