Overall impact of COVID-19 on the supply chain remains unknown even though it is forecasted normalcy in China return in April, Reuters reported. China’s role in global trade has grown significantly as a primary producer of high-value products and components that are exported globally. China has also become a large customer of global commodities and industrial products, with a very attractive consumer marketplace. Wuhan, where the virus first found, also plays an essential contribution to this economic growth.
See also: Coronavirus Impact on Port and Economy Globally
Digitations: Responding to the challenge created by COVID-19
While COVID-19 creates a catalyst for leaders to revisit their global supply chain strategy, there is a spotlight on the future of work, emphasizing the undeniable importance of business resilience and digitation.
According to Baker McKenzie insight, with the shift operations to cope with office closures, restricted movement and supply interruption, businesses start to examine their work models that might be completely transformed to the use and adoption of technology, agility programs and virtual meetings. This might well accelerate digital transformations in the workplace both currently and in the future.
Anne Petterd, Technology, Communications and Commercials Partner of Baker McKenzie, told researchers that supply chain digitisation is the way forward. It is a way that companies can begin to strategize and achieve business resilience against supply chain disruption. In this context, big data analytics, cloud computing, and other tech-related strategies can be greatly enhanced through automation and the internet of things.
COVID-19 has also put a renewed urgency behind automation and the use of robotics. Petterd noted that prior to COVID-19 developing, many regulators were reviewing how they permit the rollout of 5G technology. And the experience of COVID-19 might accelerate providing regulatory certainty on 5G.
Building the new normal in the supply chain industry
To take advantage of the digitations and advanced technology, businesses need to be agile, nimble and ready to tackle operation, labour, and demand/supply constraints. Businesses should also revisit and readdress strategic and tax planning business models post-COVID-19, ramping up on digital transformations which could lead to a stronger commitment to sustainability goals alongside building resilient businesses.
A variety and innovative measures should also be adapted, including to backstop household incomes and wages through subsidies to firms. In addition, companies can help shape a more holistic supply chain through robust planning and more updated risk management scenarios.
Read also: Labour Challenge in the Supply Chain Industry during COVID-19