Supply Chain Management: A Boon To Economy Post-COVID

While COVID-19 continues to wreak havoc and brings almost every industry down to its knees, its adverse impact on the Supply Chain Management (SCM) is equally noticeable. The ongoing crisis has surely revealed the fragility of the modern supply chain. With businesses and organisations struggling to procure the basic products, panic-buying on the part of people, and services being conducted from home, multinational companies have experienced both the supply and demand shock. This has made the efficiency of Supply Chain Management vulnerable, leading to an incessant need for the latter to adapt and come out stronger and smarter. 

It is true that the rising costs and downsized capacity have shaken up the logistics market. The deteriorating economy indicates that things are not likely to get normal anytime soon. Even logistics with China has been affected to an unfathomable extent. The lockdown in China and its dominance in key areas have laid bare the problem with the modern supply chains based on lean manufacturing principles. But there’s always a way around:

It is conjectured that supply chain management can be a boon to the economy. 

How is it possible?

Consider the initial demand shock where people had been stalking up on certain products and demand for those products have increased dramatically, and the demand pattern for many consumer goods have become more challenging to predict. There seemed to be an apprehension that supply chains would be unable to respond to this sudden and massive spike. Although, they did answer the call! With the amazing endeavour of the logistics, the supply chain professionals working round the clock. The shelves were stocked in no time and providing consumers with a great solace in such distressing times.

Of course, the traditional supply chain models were not strong enough to respond to this call. The replenished models were the outcome of all the joint effort and capacity to maximise production. With the shutdown of shopping malls and local streets, many companies have realised that they have to completely digitalize and foster the online trading environment by adopting digital technologies. Every sector is moving towards being digital and with the help of logistics service providers, they also started embracing more online shopping activities.

To fill in the shortage, supply chains are coming forward with reinvention by re-purposing their production facilities. As in the case of L'Oréal, production facilities are being maximised to produce hair sanitizers which once were used only for making fragrances and hair gels. Thus the supply chain management process is showcasing singular resourcefulness and adaptability to even out the odds. 

With the whole world increasing its reliance on technology, digitisation in the SCM is the need of the hour. It will be extremely useful in building up sturdy supply chains and help identify and recruit new suppliers within the shortest possible time, thereby boosting the economy.

Again, the supply chains can decentralize their manufacturing capacity by narrowing it down to the regional or local markets (bringing it home).