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Impact of COVID-19 on Supply Chains

None of the industries across the globe have been spared from the devastating impact of COVID-19. The entire world is experiencing lockdown with schools, offices, shopping malls, and manufacturing units, among others getting shut down. This event has deeply affected our daily lives and supply chains that were helping companies to ensure timely deliveries of both essential and non-essential items. While the global leaders struggle to make decisions regarding the containment of the COVID-19, supply chain leaders need to assess the impact such disruptions can have on the global supply chains. With the pandemic creating havoc across the globe, more and more companies have been forced to throttle down or temporarily shut manufacturing and assembly unit. In order to reduce Supply chain costs, companies are having to pursue strategies such as lean manufacturing, offshoring, and outsourcing. With further globalization and integration of Supply Chains, risks such as this have far-reaching consequences. There needs to be a shift in the mindset to take into account risk management and ensuring business continuity. Companies need to be able to monitor all aspects of their Supply chain right from manufacturing until the product reaches the hands of a consumer, this would help them get the complete picture. In times of crisis, they are able to prioritize efforts to tackle the challenges, assessing customer needs, inventory availability within the reach of logistical hubs among few.
Amid the COVID-19 pandemic, a business opportunity for predatory criminals looking for fast cash has spiked up. With the high demand for personal protection and hygienic product across the world these criminals have started producing counterfeit products which play with the lives of people in these trying times. Authorities around the world seized nearly thousands of counterfeit surgical masks, sub-standard hand sanitizers, unauthorized antiviral medication making them the most commonly sold medical product online. On one hand, consumers are becoming victims of this racket because there is no provision to validate the purchase on the other hand Companies with low visibility of their product movement across the supply chain do not have 360-degree control over their chain. At this time, when governments across the globe are advising people to use sanitizers to avoid contamination. Many cases of selling fake sanitizers have come up and we need to be worried about it. We cannot be sure if the food items that we are purchasing are even original, which has its own repercussions.
The current outbreak offers valuable lessons for companies worldwide, and particularly Indian companies that focus on short term profits with lean supply chain strategies, contributing to supply chain vulnerability. The whole COVID-19 situation would be an eye-opener for decision-makers to reconsider the existing supply chain structure and design them based on new performance measures such as resilience, receptiveness, and reconfigurability. Experts suggest an ideal way to tackle the current situation and avoid future business disruptions is Digital Transformation. Not only corporates, even companies that belong to the machinery field such as metallurgy, mining, oil and gas need to consider converting their existing traditional approach into tech-enabled processes.