After 3 years of living in the shadow of a pandemic, finally, the World Health Organization declared that Covid 19 is no longer an emergency. The pandemic has caused significant disruptions in supply chains across the world, affecting businesses of all sizes and industries. The pandemic impact extends not only to manufacturing, but also to transport, distribution, and customer consumption of products. In this blog post, we will take a look at the changes the supply chain experienced due to COVID-19.
Global trade disruptions
Starting from China, the very heart of global production, that was imposed the most strict rules regarding covid with what's called China's Zero Covid Policy. As a result of those regulations, entire cities, including numerous factories, were completely shut down. The shutdown led to huge shortages around the globe while at the same time, demand for many essential goods increased.
Taking face masks as an example, which are usually produced in China, China's inability to provide enough of them made the price of those masks rise drastically around the world.
Another disruption was actually caused by mass consumption. People were scared and didn’t know for how long they won’t be able to leave their places and didn’t know how dangerous the situation is, which made them overstock on many essential items. Instead of buying one pack of eggs and one pack of toilet paper as they used to, each family tried to buy as many as possible causing huge shortages.
Border closures and travel restrictions created difficulties for goods to be transported between countries and regions, as well as the shutdown of entire airports and ports and a labor shortage as a result of quarantines. This has caused delays in deliveries and increased transportation costs. Also, many containers were held empty at many ports worldwide causing a shortage of containers and hence the cost of shipping containers rise dramatically.
Although covid is no longer a threat to the world, those transportation challenges effects are still with us and will probably stay for a bit longer.
Shift in customer behavior
The lockdowns that took place across the globe, restricted people from getting out of their homes and forced them to adapt to new consumption behavior, as E-commerce satisfied this need. In addition, many individuals found comfort in shopping online, which gave them a sort of escapism from the outbreak stress.
At the same time, the pandemic put pressure on businesses to adapt quickly to the new shopping trends, to join the e-commerce market. Adapting omnichannel operations became a must for businesses survival. Even if a company was not planning to make the change, the situation forced them to. A new habit of shopping and the business new offering transformed the way people shop and will remain so for years to come.
The pandemic has highlighted the importance of digitalization and automation in the supply chain
Back in the days of outbreaks, everyday companies were shutting down their entire business due to covid infection. Offices, factories, and ports were shut down in a blink of an eye, causing huge instability. The lockdowns, especially in China caused huge disruptions and conjunctions, out of stocks globally, and more. This has demonstrated how digitalization and automation of the supply chain are crucial. The ability to continue operating even when people are unable to come physically became an extremely valuable asset.
Need for visibility
The pandemic also highlighted the importance of visibility and transparency in the supply chain. With so many moving parts and stakeholders involved, it became clear that better data sharing and collaboration were essential to maintain the flow of goods and services. This has led to increased investment in technologies that can provide end-to-end visibility and traceability in the supply chain. Having full visibility over the entire supply chain offers businesses the ability to identify issues at any location and shift operations as needed to keep the flow smooth.
The pandemic has disrupted traditional supply chain practices, exposing weaknesses and highlighting the need for greater resilience and agility. The disruptions caused by the outbreak, including trade disruptions, transportation challenges, and shifts in customer behavior, have highlighted the need for adaptation and innovation in the industry. Additionally, the crisis has underscored the need for visibility and transparency in the supply chain, leading to increased investment in technologies that provide end-to-end visibility and traceability.
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