Managing supply chain in this COVID-19 times has proved to be a tough challenge for countries across the world. The pandemic has driven governments to implement policy and regulatory changes which in turn has impacted companies. As such governments and companies need to re-evaluate their complex global supply chains.
Benjamin Laker, expert commentary on global affairs for leaders, says organizations struggle to assess risk beyond their primary suppliers, like what Foxconn is to Apple, such as leaving them exposed to risk factors associated with the many tiers of sub-suppliers that exist underneath primary suppliers. If companies do not find a new way to assess and react to fast-changing supplier risk, Laker says, they will likely suffer further business disruption that causes bottom-line impact. Moreover, government agencies and manufacturers that supply them are also at risk from economic, and in some cases, national security impacts, without clear and continuous visibility into supply chain risk.
Moreover, increasing pressure on companies over time to reduce supply chain cost has forced companies to look for low-cost supplier and production facilities located at different locations around the world. And in the process, companies have become global and developed a diversified complex supply chain network structure. But COVID-19 has disrupted the entire system and raised questions on the last three decades popular manufacturing strategies of outsourcing, and offshoring etc. It has shaken the operation of the global supply chain and has compelled firms and industries to reconsider and transform its global supply chain network model.
The disruption has drawn concerns on the collection of raw materials from one place, produce in another country and sell in a different market place to keep the sourcing, production and distribution cost at a minimum. Experts explain that by acquiring global suppliers, companies take advantage of quality, flexibility, environmental sustainability, cheap labor, specialized skills and capabilities. The pandemic has imposed a severe stress test on the global supply chain in terms of its resilience, robustness and fragility to continue its operation.
