Effect of Covid-19 on Supply Chain Industry:
Supply chain industry has been greatly hit by the Covid-19 pandemic. As most of the people are staying home due to the pandemic which has resulted in drop in revenue for major supply chain companies. Some of the popular supply chain companies being McDonald’s, Inditex, Intel, Nestle and Nike. Various companies have now taken various steps in order to protect their supply chain operations which would be such as educating the employees of various Covid-19 symptoms. Aligning the organization goals and targets as per the changing environmental conditions. For example, companies that sell products to China and other virus affected countries need to understand to specifically understand the impact of COVID-19 to their business. Some of the other steps to be taken would be promoting open channel of communication with the key stakeholders. Reviewing the global financial and economic situation regularly would be another important step which needs to be taken into consideration. As per the World Health Organization (WHO) the coronavirus originated in China and after which the Virus has been spreading that to that of the various different nations. In order to stop the spread of the virus there has been strict controls on travel and social gatherings.
The travel industry has been significantly impacted by the Coronavirus pandemic which has in turn effected supply chain industry. For example, tourism in various different countries has been impacted by the Coronavirus pandemic which has in turn affected the economy of the nation. Travelers are required to quarantine for a specific duration of time and are required to submit a pre-Covid test report prior to boarding an airline as a safety measure.
In my opinion, all citizens need to unite and practice social distancing in order to stop the spread of the novel Coronavirus. Organizations need to be strategic in their financial and business planning.
Edward Barribal, nut Alicke (March 18, 2020) Supply chain recovery in coronavirus times; Retrieved from. https://www.mckinsey.com/business-functions/operations/our-insights/supply-chain-recovery-in-coronavirus-times-plan-for-now-and-the-future
Wharton University of Pennsylvania. (2020) ‘Coronavirus and Supply Chain Disruption: What Firms Can Learn’, Knowledge @ Wharton, March 17 [online]. Available at: https://knowledge.wharton.upenn.edu/article/veeraraghavan-supply-chain/
Supply chains became links that have connected several geographical regions across the world, and most of the countries, companies, and organizations have relied on supply chain systems or the exports or imports of several facilities from other countries. Hence, any disruption to a supply chain would result in the loss of high revenue because it would probably affect the functioning of industries in which there is a chance that companies will face short-terms closures. In addition to this, any debacles in the supply chain systems will create a shortage of domestic needs where people will be subjected to scarcity, and hence, it would become very critical for the respective governments to manage the situations (Dickson, 2020).
Recently, the outbreak of CoronaVirus (COVID-19) has imposed a burden on the world where the functions of several supply chains were temporarily ceased. It became difficult to predict the recovery time of companies from this kind of challenging situation. However, an analysis has been made in order to approximate the estimations and predictions with the actual recovery time by using anyLosgistix simulation method “SIM Global Network Examination,” which has been approved and reputed for its abilities to measure the long-term effects of pandemic and other crises.
It has been confirmed that inventory, backup suppliers, contingency planned supply chains, resistive supply chain networks that can receive short-term crises, and flexible supply chains, which can act accordingly to such situations, play a crucial role in making the world to be resilient. This simulation model mainly centralized the view on supply and demand chains across various countries, which has added value to the analysis in which it can even help to make an evidence of predictions to be healthy. COVID-19 has originated from Wuhan city in China, which has established connections with 1000 fortune companies across the world, and it was reported that about 5 million companies have relied on the imports and exports of companies in Wuhan. Therefore, the impacts would be even more substantial and to overcome the situations, and it has been recommended to retain the strength of supply chains with the help of backup suppliers and inventory (Tahir & Masood, 2020).
The bullwhip effect can also be thought of as forcing investors into the US government debt market, as they will be tempted by a cheaper currency that has more purchasing power, than the currency of any country, and that is less expensive than the debt of all other countries, as the US is the only one to allow a dollar exchange rate below a fixed rate. By doing this, investors will find it more profitable to take US debt, if the price is higher than foreign currency, to buy US debt. This in turn will encourage consumers to borrow US debt, as they no longer have to consider other currencies that are much more expensive than their US debt, to purchase US debt. To do this, the US Dollar rate would need to become lower than the rate of the other currencies used, by the same amount, in order to discourage investment in other countries, and increase the value of US Government debt. (Lee, H. L. (2010)).
Dickson, G. (2020). CORONAVIRUS COVID‐19 ROILS DISPLAY SUPPLY CHAIN. Information Display, 36(2), 7-8.
Tahir, M., & Masood, A. (2020). The COVID-19 Outbreak: Other Parallel Problems. SSRN Electronic Journal.
Lee, H. L. (2010). Taming The Bullwhip*. Journal of Supply Chain Management, 46(1), 7–7.