- COVID-19 highlights certain problems with globalized supply chains, such as product shortages and difficulties in shifting to meet a sudden surge in demand
- Companies will face the challenge of remaining competitive while developing more resilient ways of acquiring supplies
- Strategies include avoiding sole suppliers for crucial products and using innovative technologies to improve efficiency
During the COVID-19 pandemic, many companies have been grappling with disruptions to supply chains that span the globe. Trade restrictions, sudden shifts in demand, and other pressures strained the traditional networks and led to shortages in everything from toilet paper to critical medical supplies.
In the United States, the situation has led to some amplified calls for a re-shoring of American manufacturing, though a recent survey found that few companies with operations in China were considering this option. Nevertheless, pressure has increased on companies to develop new strategies to avoid similar problems during future disruptions.
The key challenge businesses are likely to face is how to develop more resilient supply lines while continuing to offer products at an affordable price in order to remain competitive. One of the most common strategies is to identify vulnerabilities and broaden their supplier base by finding additional sources for important items. Companies are also more likely to stockpile critical materials and look into innovative processes such as automation or 3-D printing.
The pandemic has also led to heightened interest in improving risk management, assessing whether the company should put more focus on product variety or better flexibility, improving sustainability in supply chains, and regionalizing supply chains.
