The Impact of COVID-19 on Supply Chain Management
In January 2020 I was hosting a course at Cranfield University being attended by supply chain leaders from global blue-chip organisations, we were focusing on how we could create more adaptive supply chains, supply chains that could cope with the future challenges that really create value for both their customer and their individual organisations. As the course progressed various delegates were increasingly being pulled out of sessions to manage significant disruptions that were starting to take place with suppliers in China. The supply chain was signalling issues before the media was reporting challenges. This was resulting in late shipments; manufacturing facilities being shut down and a reduction in logistics capacity. Supply lines were being cut and it was recognised that the impact of this would rapidly impact shipments coming into key markets such as Europe and the US. At this stage little was known as to the cause of the disruptions but rapidly it became clear that the cause was a nation battling with a pandemic. Within the coming weeks, key areas in other nations were being impacted, for example, northern Italy went into lockdown, train lines from Italy to Austria were temporally halted but then reopened, rail freight was disrupted. COVID19 was now creating significant supply-side disruptions, ports were closing and within weeks as lockdown rolled around the globe demand patterns shifted resulting in significant demand-side disruption. To survive organisations had to adapt rapidly.
Prior to COVID-19 big changes were already taking place within the supply chain, the advent of Supply Chain 4.0 where technologies provide new ways of working delivering value in new ways to customers by combining the physical with digitalization, for example, new robotic approaches, data analytics enabling improved monitoring and intelligence was moving forward at a pace. My predictions in 2019 was that these new technologies and new ways of working would find acceptance in the next five years and slowly be adopted, however we suddenly found that these innovations were being implemented as a necessity in some cases within five weeks or even five months by organisations! We have seen a move from an “old normal” and we are progressing to a “new normal”, a “burning platform” had been created by the COVID-19 pandemic resulting in innovation and change.
However, in moving to the new normal, we have to pass through a phase, we can call it the “pre-new normal”. This phase is where our “old normal” supply chain processes, infrastructure, information systems and organisations are forced to cope with the new world we are in. we experience “birth pains” as we have to change radically our supply chain structures to move to the “new normal” and potentially a “new better” where we consider a sustainable way of working ensuring economic, environmental and social sustainability is embedded for the future.
Innovation is “about taking ideas that are new to you and creating economic, social or environmental value”. So, as we progress through the pandemic the importance of sharing ideas and insights from a variety of contexts enables individuals to innovate in the future. The chapters in this book provide an insight into a number of cases, perspectives and impacts of COVID-19 on supply chain management. What is included here gives a snapshot of the challenges and I am confident over the coming years further cases will be documented and further books published on how the pandemic has driven change and hopefully moved us to a “new better”.
Our first Chapter, Rethinking Supply Chain Strategy to face global challenges imposed by COVID-19, provides an insight into the importance of supply chain strategies and technological approaches that can be utilised in increasing resilience and mitigating the risks presented to the supply chain of COVID-19. It discusses the Supply Chain 4.0 elements, for example, Robotics, Block Chain and augmented reality and how these can be utilised to combat the challenges created by the pandemic. Recognising that people in the supply chain are one of the most vulnerable elements and asking whether technology can enable a more resilient supply chain environment. Importantly these technologies can increase value and reduce cost for all supply chains so with or without the “burning platform” of the pandemic should be explored.
How government intervention can support economic and social sustainability has been a critical issue as we progress through the pandemic, the recognition that competition is between supply chains, not individual companies has resulted in governments using policy interventions to support industrial sectors and improve resilience. Chapter 2, Impact of the COVID-19 on Global Supply Chain – Some Sectoral Policy and Economic Responses and Business Intervention, discusses the finding from a systematic literature which provides useful insights into the approaches utilised in this important area of policy and how supply chains can be impacted.
Chapter 3, The Impact of COVID-19 in Delivering Customer Social Value through Supply Chain, recognises the importance of customer value and social value drives that ultimately drive supply chains. Supply Chains are value delivery systems and when the value required by consumers changes the supply chain needs to adapt to ensure it delivers value effectively. The pandemic changed what many consumers value, for example, the value of shopping online where an individual could feel “safe” rather than going to a physical retailer which may feel “unsafe”. To manage such changes effectively agility is required.
Collaboration and relationships have been seen as critical in ensuring resilience for global companies in enabling supply chain resilience. Chapter 4, Facing Supply Chain Disruptions: Strategies to Ensure Relational Continuity, focuses on strategies for ensuring relational continuity. A key issue discussed by procurement and supply chain managers during the past year has been the importance of collaboration and managing relationships to ensure resilience in the supply chain. The importance of the relational intelligence of an organisation in ensuring continuity of supply has become increasingly important as we move into a world of procurement for resilience rather than for cost.
Innovation has been driven by the pandemic in many areas our next chapter, Innovative practice and supply chain resilience during COVID-19 pandemic: A case study in Thailand, discusses how a collaborative platform creating visibility of supply chain stocks of personal protective equipment for all stakeholders was rapidly deployed and implemented. This enabled all stakeholders in the supply chain through the use of “Dash Boards” to monitor the supply chain of key resources to save lives. The example demonstrates the increasing importance of transparency and continuous monitoring and intelligence in coping with high levels of volatility through enabling better collaboration across the supply chain as a whole.
Our final Chapter, Vaccine Supply Chain Distribution under COVID-19 Pandemic: Stressed, Resourceful and Resilient- Lesson Learned from the United States Experiences, provides an excellent insight into the challenges experienced in the United States, and how the existing political and geographic environment can result in significant issues affecting the deployment and implementation of a lifesaving supply chains, the tensions between a pandemic and commercial supply chain are examined and how conflicts were eventually addressed. Communication and collaboration between all stakeholders are emphasised. It should be highlighted that the experience of these tension was also witnessed in other environments and I am sure additional cases will be documented in the future as we reflect on the global vaccine supply chain.
My hope is that the content and ideas shared in this book will provoke thought and debate and ultimately enable both academics and practitioners to innovate. I would like to thank all the authors for taking the time to share the content and I hope that as we progress to a “new better” the knowledge shared will enable individuals and organisations to create positive and sustainable action.
Professor Richard Wilding OBE,
Professor of Supply Chain Strategy,