The impact of Coronavirus and Covid-19 on global supply chains

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2020, the world seems to be living its worst nightmare. The never-ending spread of COVID-19 doesn’t seem to slow down any soon. The outbreak that began in China now has 1,347,587 reported cases and over 74000 deaths. Do you remember Thanos from Avengers? Corona is exactly the same just one snap and half of the population from the world will be all gone. The deadly virus seems to have impacted several industries to a great extent and retail, eCommerce development industries, and global supply chains are no exception. In February 2020, the World Health Organisation (WHO) named the disease the coronavirus disease 2019 (abbreviated COVID-19).

According to several sources, 938 out of Fortune 1000 companies seem to have been affected by the virus and the situation is going to be worse before they get better. Well, we won’t talk about any other industry rather than the supply chain. Production has completely stopped and that’s the prime reason why businesses are struggling to deal with the fallout.

As a result, companies have started reducing the number of products or components in China dramatically reducing the size of the Chinese market. Even tech giants like Apple cannot receive the quantities of iPhones and other products that the market needs. Apart from this, Tesla puts its business with China on hold.

Now how does this virus spread?

• It spreads among people who are in close contact within 6 feet approx.
• It spreads via respiratory droplets when an infected person coughs or sneezes. These droplets can land in the mouths or noses of people who are nearby or possibly be inhaled into the lungs.

Speaking of which, recently I came across an article or news piece which stated that several hospitals, grocery stores, and other essential services providers are seen enlisting robots (including both hardware and software) in the fight against the coronavirus outbreak. One of the best examples was, the Mater Misericordiae University Hospital in Dublin is found deploying software robots that generate an automated response to data inputs, speed up the processing of test results for COVID -19.

Introduced as a pilot project, robots were able to sort and distribute test results from the hospital’s on-site lab in minutes, enabling to quickly put infection prevention and control measures in place where necessary. As a result, more and more companies are found using such results to improve their own operations in response to the epidemic and it may quite interest you to know that in some cases companies have succeeded in improving the overall response to COVID-19.

According to tech companies, there is high-end use of automated software and chatbots seen to improve communications and collaboration capabilities for remote workers, etc.

Taking a closer look at today’s economy, supply chains have become globalized and complex like never before. Many factories, industries have been affected by lockdown and quarantines, production sites in other countries. The effects of the coronavirus on supply chains are already evident and much rests upon the international scientific and healthcare response to the outbreak. Countries are not taking the issue lightly and are making concerted efforts to quarantine, provide medical access and control the spread of the disease.

So in such cases, how can businesses better prepare themselves for supply chain disruption? Think of anti-fragile supply chains that aren’t just strong but are malleable to ensure they continue working irrespective of such disruption. Moreover, one can also think of establishing an effective digital foundation. For instance, Artificial intelligence can be used to analyze tons and tons of data from an array of public proprietary sources to learn from previous periods of disruption and suggest what leaders can do to meet upcoming challenges.

Rethink on the structure of the global supply chain

As soon as COVID – 19 will be brought under control, what a collective sigh of relief it would be to us, isn’t it? But at the same time, we need to be prepared before the nest disruption hits the globe. So that businesses don’t need to rest on their laurels.

The supply chain becomes a company’s biggest risk during times of disruption. Building an alternative, more sustainable global supply structure won’t be easy but it is a doable job. Further below I would like to provide how we can actually achieve visibility across the entire supply of chain.

#1 Paper to digitization – Of course, for the most part, companies are yet to digitalize their supply chain processes because they have determined the cost of doing so might not bring any efficiency or security. So in such a situation, it becomes extremely vital to take some protective measures. Most operations dependent on physical assets such as paper can face serious disruption when physical presence is not a possibility.

Digitizing is the key and its not simply a matter of cost. In order to limit the impact of points of failure in the value chain and make data available through digital means. Speaking of current pandemic, more and more government and businesses with high-end digital infrastructure and enabling regulations such as e-signature and e-transactions laws.

#2 Ensure data privacy – There is a reason why suppliers don’t reveal information to end customers, even though it’s easy for them. You see most of them fear losing commercial advantage if their customers get to know about their operations, pricing, and sourcing. Suppliers now have to be able to control exactly who receives what data from them, and verify such controls independently.

Have you come across the term Electronic Data Interchange (EDI) and excel spreadsheets. Supply chain ecosystem, data privacy is easily controllable and not a concern. When the data in these communications need to be distributed to more and more parties, traditional supply chain systems which are centralized cannot grant independent and auditable access controls to each individual party. It comes in Blockchain where suppliers can audit their data-sharing permissions directly on their blockchain node.

#3 Sharing data – There are lots and lots of buyers out there who value data to a great extent. One of the most cost-efficient and profitable methods to institute supply chain finance programs that offer buyers their own competitive interest rates.

Here again, you can use blockchain turns out to be the ideal technology to ensure that data on performance and risk, data can be easily shared in an authenticated manner with financiers and other parties to a transaction, even though there is no direct relationship between them.

More about Author:

Henrik Adams is an eCommerce Industry Analyst, who worked with one of the leading Magento Development Company – Sparsh Technologies. He likes to write about eCommerce development, web development, Blockchain, Supply chain, and more about current trends.

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