This week marks one year since the World Health Organization officially declared a global pandemic because of the widespread outbreak of the Covid-19 Sars pandemic.

One Year Ago

One year ago, we were all beginning to sense the sobering effects of what a pandemic can be as well as its impacts on global populations and businesses.

One year later, we need to again acknowledge that collective efforts of multi-industry global supply chains, amid such extraordinary challenges. As MIT professor Yossi Sheffi noted in his latest book, supply chain management teams responded when it counted most.

Leading up to the year 2020, there were several significant global disruptive events. They included, among others, the economic and business effects of the 2008-2009 global financial crisis, the multiple disruptions related to the devastating tsunami that occurred in Japan in 2011, and the significant floods that impacted Thailand that same year. The events went on, with natural disasters, extraordinary storms and the effects of geo-political trade and tariff tensions.

Supply Chain Matters Multi-Industry Supply Chain Perspective

What was different with Covid was the occurrence of shocks among product demand, global supply and transportation networks all occurring simultaneously.  With population lockdowns and employees confined to their residences, access to business and supply chain systems, and the need for communications and added collaboration drove efforts toward whatever forms of digital and online access that could be achieved to garner information.  Employees themselves working on the front lines needed to be adequately protected. Suppliers needed to be contacted and assessed as to their capabilities and prospects. Transport networks were challenged with periods of suspension or quarantine measures. Once more, information was changing daily, that is when information could be garnered.

Priorities needed to be established as to what resources needed to be maintained and what immediate needs had to fulfilled. We heard senior supply chain leaders express initial concerns as to the state of their businesses and their respective supply networks. China, the hub of global manufacturing, was just beginning to return from a country-wide lockdown, and manufacturers across that country were making their assessments.

In the weeks and months that have followed, citizens of the globe have become more attuned to the critical role that supply chains perform in daily lives, and in the needs for health and safety.

Healthcare delivery, medical protective equipment and pharmaceutical supply networks took on dimensions of national and local importance.  Nations and individual states took on emergency roles for product sourcing and procurement within supply chains that were roiled with far too much demand and little supply. Passenger planes, those that had clearance to fly to certain countries or within nations, became air freighters overnight.

Boardrooms, equity markets and C-Suite executives have found a new appreciation for the critical importance that supply chains have in maintaining determining business capability and required business needs. For some, preservation of liquidity or business continuity, for others such as essential food, cleaning and disinfecting products, meeting explosive product demand.  Consumers and businesses turned more to online channels for ordering needs, and that added other challenges as to how products packaged for bulk requirements needed to be converted to retail packs suitable for parcel networks.

 

One Year Later

One year later, as the end of the first quarter of 2021 approaches, the landscape is so different, yet the sense of volatility remains the same. Supply chain management professionals with multiple years of industry or functional experience continue to observe that they have never encountered this level of volatility and extraordinary change.

Product demand related to satisfying needs of school populations and consumers that remain basically confined to home offices have exploded demands for added computers, online conferencing accessories, office and personal exercise equipment, furniture, home extensions and other product needs have created product demand streams that never existed before.

Medical research teams have now come up with a variety of effective vaccines, and extraordinary, almost war time efforts are underway to prioritize and ramp-up vaccine supply networks and distribution.

Since April of 2020, there has been an extraordinary “V” shaped response of global production and supply chain activity.

Summarized Global Supply Chain Activity

 

That in-turn has outstripped the ability of ocean container carriers to operate efficiently because of an acute imbalance of available shipping containers, as well as highly congested and overwhelmed ports.

I know believe that supply chain teams can anticipate a new renaissance of supply chain digital transformation and technology adoption. This will include areas of more predictive, informed and agile decision making, added synchronization of physical and digital information flow, and broader leveraging of Cloud based platforms for integrating end-to-end product demand and supply network information streams and adaptive learning.

Indeed, in one year, so much has changed, so much has been accomplished, and new learning has occurred.

Prior to Covid, we never seemed to take a pause from every day demands to reflect on what history has provided and what the future will bring. That is forever changed, in many dimensions. For global wide supply chain management teams, there is a renewed appreciation and a new opportunity to make a difference once again.

 

Bob Ferrari

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