Strengthening Supply Chains in the Wake of COVID-19

COVID-19 revolutionized all industries around the world. The industry people were most concerned about, even if they didn’t realize it, was the global supply chain. Victor Restis, president of Enterprises Shipping & Trade S.A., pointed out that empty supermarket shelves and a shortage of essential supplies like toilet paper and hand sanitizer were simply the visible impacts to consumers in the global supply chain. When the industry is analyzed as a whole, there are stops in production and shortages of raw materials to finished products. These disruptions in China, Europe, the Americas and other countries demonstrated that the COVID-19 virus was an event of unprecedented scale and severity for supply chains.

After the initial fallout from the global supply chain disruptions, several questions arose. Among them was how to strengthen supply chains to mitigate future events of similar magnitude.

The world got a glimpse of part of the solution when leading companies shifted production focus from their primary product lines to produce much-needed medical equipment. In the United States, legendary automakers General Motors and Ford went from making cars and trucks to respirators. Restis noted that GM and Ford soon joined other companies, including Tesla and Virgin Orbit. The combined effort was reportedly enough to satisfy a national shortage with enough surplus to send to other worst-hit nations.

As with ventilators, production growth for N95 respirators (masks) reached an all-time high with US companies Honeywell and 3M leading the effort. The production of masks increased to exceed 30 percent in one year, in addition to the 1.1 billion produced annually. 400 million of those made in the US

The road to recovery and resolution of future supply chain disruptions will need to go well beyond respirators and masks. Government leaders are already studying the impact of COVID-19 on their ability to maintain supplies, both medical and otherwise, in the face of future pandemics. Globalization is now facing additional scrutiny, and nations were considering a virtual closure of their borders when it comes to global trade. US President Donald Trump has already promised efforts to regain jobs, especially in manufacturing, from China and Mexico, and other nations are now considering similar measures where it makes sense.

Restis noted that leaders around the world are likely rethinking global business strategies and looking for ways to bring some aspects of manufacturing within their borders. This not only helps protect your citizens during similar events, but also provides a more influential position within the international community. Underpinning manufacturing and distribution will likely spark local economies and provide a safety net that can be activated much faster to protect its citizens. The alternative is to hope that production in other countries survives and that the global supply chain network does not fail.

The good news is that the global supply chain was stable in the face of the pandemic. However, it shed light on potential problems that will be examined and strengthened. Perhaps a more diversified manufacturing and distribution of supplies is proposed. Meanwhile, many countries have already invested in layoffs to absorb future risks.