The Severe Impact of COVID-19 on Global Supply Chains
Supply chain management is the management of goods and services that transform raw materials into final products. It involves a business's supply-side activities to maximise customer value and gain a competitive advantage in the marketplace. SCM represents techniques by suppliers to develop and implement solutions that are as efficient and economical as possible. Supply chains management cover everything from production to product development to the information systems needed to deliver the product.
The lack of visibility and transparency is the most significant task for a firm to survive. Most organisations lack transparency in supply chain processes and the analytical tools needed to predict better and prevent disturbances in the supply. This essentially is caused due to the inability to hold the overwhelming amount of data scattered across different processes, sources, and channels. Supply chain organisations face difficulties to keep pace with technological advances and changes that the digital age is bringing to industries and markets.
The coronavirus pandemic has challenged the global supply chain market drastically. COVID-19 has been having a global impact, where many supply chains firms have faced multiple losses- at component suppliers, at manufacturing sites, and logistics, among others. It is difficult but not impossible for firms to have efficiency across all those operations and still survive in the market.
The COVID-19 pandemic has a severe impact on the supply chains of almost all the European manufacturers. Most of them are experiencing a negative impact due to the pandemic. COVID-19 has compelled many companies and industries to rethink and transform their global supply chain management technique. According to a report by the EIU, over-reliance on Asian, and especially Chinese suppliers and clients was already a significant concern for SCM firms before the COVID-19 disruption in 2020. After the outbreak, businesses are planning to diversify supply chains and refocus on local produce where possible.
The COVID-19 pandemic has resulted in an exponential increase in demand for anything on the internet. Companies are investing in tools such as AI and Machine Learning (ML) to successfully operate during the pandemic, which has further fuelled the increase in the adoption of cloud based SCM solutions across SMEs. The IoT revolutionises supply chains by increasing visibility and real-time tracking for raw materials and final products- not to mention life-saving vaccines. Cheap and reliable are making networks more responsive and competitive. Affordable and reliable sensors that provide large amounts of data will be essential.
Over the past year, optimising supply chains was focused primarily on cost efficiency and producing commercially best outcomes. However, recent years has demonstrated that supply chains will need to begin factoring resilience and adaptability into their calculations. Before the COVID-19 pandemic, some companies started anticipating this next evolution, but this crisis has exposed those weaknesses in the supply chain, such that many are looking at what to do next. Such decisions should, of course, focus on the supply side patterns and consider that demand patterns can be unpredictable going forward – the key here is to have a broader approach and ensure that many different perspectives are considered.
Real-time supply chain visibility becomes essential for successful FMCG supply chain execution and unplanned cost avoidance. Additionally, this industry needs inventory management solutions to help end-users keep inventory controlled and move on time. Without careful warehouse control and inventory management, FMCG distributors risk damage to products that can put consumers at risk, open their business to liability, and violate stringent safety laws. SCM services provide FMCG companies with real-time supply chain visibility, business intelligence, and cost-reducing operations.
