Now You See It (Or Don’t): How COVID-19 Impacts Global Supply Chains | Global Resilience Institute

Though many of us are now spending our time inside due to the novel coronavirus, the world remains chaotic outside of our doors. Doctors, overworked and in understaffed hospitals, worry about saving enough lives, including their own. Infection rates fluctuate daily, and many states have begun to slowly reopen. One focus of many consumers is the lack of essential products, such as toilet paper and foreign goods. What consumers don’t see, however, is that many companies are finding themselves lacking materials or components that go into their products, as well. The coronavirus pandemic has revealed significant and dangerous weaknesses in supply chains, including life-threatening ones, such as those for medical supplies.

(Chris Waits | Flickr) Empty Shelves at a Grocery Store

Why is this happening? One of the largest problems has to do with slows and complete stops in the supply chain. In a perfectly resilient world, this would not be a catastrophic issue – companies would know the logistics of each of their suppliers, thus not only being able to resolve the issue at its source but even predict it. However, this is not the case; many companies do not know where many of their suppliers source their raw materials or other components, leaving them vulnerable in the case of disaster. Though supply shortages are not a new phenomenon – many natural disasters have left companies without suppliers – many organizations have continued to put off tracking their supply chains due to the expensive, and exhausting nature of the matter. Unfortunately, now these companies are seeing the dire effects.

Despite the incredible undertaking of establishing a documented supply chain, there are many solutions for entities interested in doing so. Services such as Resilinc, Elementum, and Llamasoft can help producers track their supply network and analyze its data. Though the goal is to track all the way down to the lowest tier of raw materials, which these services often cannot do, they provide a first and much-needed step into the process. In order to build more resilient systems, some experts advise that a critical supply chain stress test, similar to the stress bank test created after the 2008 financial crisis, be instituted. This test would help the businesses identify their abilities to recover during and after a disaster, allowing for the prevention of critical goods such as personal protective equipment for health workers.

There will still be problems in the supply chain going forward. In these unprecedented times, we cannot predict how the rest of the pandemic will unfold for our economy. While pandemics are a part of human history, it is unprecedented in such a globalized age. We must use this crisis as an opportunity to study how our systems are affected by such a massive shock and find solutions as to how we can make them more resilient in the future.


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