Do you think that the pandemic hasn’t affected the businesses in your area? Think again. 98% of senior decision-makers say Covid-19 disrupted their supply chains. As a result, 90% think future infections could have similar consequences.
Global supply chains aren’t as reliable as we once thought. The pandemic has highlighted the shortcomings of our current system. Below, we’ll discuss three major impacts Covid-19 has had on global supply chains.
1. Products From China
As we all know by now, Covid-19 likely originated from a marketplace in China. When news of the virus first hit the mainstream, the world acted fast. In America, President Trump issued a travel ban that restricted Chinese travel.
Among the confusion, many businesses wondered — are Chinese products safe?
Their questions were never answered, though, because massive lockdowns immediately started. Across the world, businesses got shut down and employees got instructed to stay at home.
Within a few short days, American businesses could already feel the pinch. There were immediate shortages of:
- Critical medical supplies
Before Covid-19, China produced half of the world’s medical masks. With such a huge chunk of the manufacturing market, the global markets are dependent on China.
2. Disruptions in Operations and Business
The pandemic only highlighted our dependence. As you can imagine, shortages resulted in disruptions in business operations worldwide. The hardest hit industries include aerospace and defense. The majority of industries, though, have experienced:
- Increases in supplier prices
- Suppliers going bankrupt
- Export or import restrictions
- Safety restrictions leading to delays
These disruptions caused prices to rise across the board for the most part.
3. Supply Chain Innovations
Due to all the uncertainty, businesses want to shift away from the global supply chain. They’re seeking out stability and security, which is often closer to home. You can expect to see more domestic production of products across the globe in 2021 and beyond.
Supply chain innovations, like AI and the blockchain, are also getting noticed. AI can get used to detect potential disruptions before they happen. Businesses in the post-pandemic world will put more value on being proactive.
The potential of blockchain technology is also getting the attention it deserves. Blockchain technology provides security, safety, and transparency. In theory, all goods and transactions could get produced and sold without a middle man.
As for managing the supply chain, the blockchain offers:
- Better data collection
- Improved logistics
- Greater supply chain efficiency
- Better security
Are you interested in learning more about the digitization of supply chain management? Consider getting your RPI Supply Chain and Logistics Certificate to get informed.
What Will Post-Pandemic Global Supply Chains Look Like?
As we enter into the post-pandemic world, they’ll be a ‘new normal’ when it comes to globalization. Global supply chains of the future will be more resilient, adaptable, and secure. As a result of the pandemic, new innovations and technologies are at the forefront.
Has your business’s supply chain gotten disrupted by Covid-19? You’re in good company. If you’re a business owner, then it’s important to stay up-to-date. Keep browsing through our business blogs to stay informed.