Coronavirus first came to notice in 2019. In a few months, it turned into a full-blown pandemic. This pandemic then affected many aspects of our lives. There were and still are travel restrictions due to the fear of covid travelling from one place to another. It greatly affected every aspect of our lives. This includes our mobility, our food industry, our business, our livelihood, and our health.
As our main concern is global supply chain logistics, we will discuss how it is affected by the pandemic worldwide. This discussion is of extreme importance as businesses all around the globe are standing on their feet with the help of the supply chain. It helps companies to be efficient in terms of operations, costs, and revenues. A good supply chain is a reason behind the expansion of companies and firms. You must think, how? Well, the reason is they help retailers, vendors, distributors, and etc, in making sure their products are delivered smoothly.
Let’s start with basics first to know how pandemic disturbed operations of major global supply chain logistics companies.
What is Global Supply Chain Management?
This operation, global supply chain management, has become more common in the past two decades. It came into being due to readily available raw materials and the cheap cost of manufacturing in developing countries. The manufactured products were then made easy to transport from one part of the world to the other.
Global supply chain management was developed for the system of transfers and operations to carry out smoothly with minimum glitches. It takes care of all the materials, whether raw materials, the finished products, or machinery required for the processing. The transfer takes place between manufacturers, suppliers and retailers, vendors, and etc.
This system covers networking for manufacturing units, their transportation, logistics, and communications worldwide. Global supply management is there to make sure the trade is smooth and efficient.
Importance of Supply Chain Network
The supply chain helps in communications and links between businesses or businesses and consumers. The supply chain is responsible for the deliveries of various products, be it of any kind. Their importance is mentioned below:
- They help in moving raw materials and converting them into a finished product
- Provides coordination between warehouses, retailers, vendors, manufacturers and customers
- Distribution of finished products and goods to customers
Effects of Covid on the Global Supply Chain
Natural disasters are common and keep taking place from time to time. Businesses and firms’ supply chain networks are used to deal with it from time to time. However, the effect covid had on supply chain networks has been more significant than any disaster before.
Industrial Scale – Every industry faced losses at a large scale as orders and procurements were delayed or canceled.
Reduced Orders – As mass unemployment was prevalent, many orders got canceled or returned. This resulted in huge losses for e-commerce businesses.
Duration of Effect – If natural disasters are too horrific, it takes years for companies to recover. The effect of covid is on a much greater scale than any natural disaster in the past 50 years. Even if there was a disaster, it was mainly limited to a particular region. Pandemic has affected all parts of the world. That is why it will take one or two decades for complete recovery.
As long as covid exists and there is not some solid treatment for it, global supply chain management will be affected in one way or another. Businesses and companies will have to adjust and plan as per that with the supply chain departments.