Pros and Cons of Pandemic-Provoked Supply Chain Trends

Courtesy of Industrytoday.com.

When isolated cases of a novel coronavirus were first reported in Wuhan in January of 2020, it was difficult to imagine the pending tragedy and threat to global health. Also unfamiliar to many at the time was the virus’s ability to rapidly plague supply chains, soon triggering widespread shortages of essential items including cleaning productsmedical supplies and PPE.

From the onset of the pandemic, supply chains have held the public eye like never before. Shortfalls and alarming risks have been disastrously exposed against a perilous backdrop of erratic consumer demand, production lags and travel restrictions. With a year of disruptions on the books, many of the most unyielding trends we’ve observed are continuing to reshape what supply chains will look like post-pandemic, presenting both positive and negative implications for businesses.

Pro: diversification enables agility against supply-side shutdowns

An illuminating lesson learned amid the pandemic is that demand-side shocks in consumer markets pose greater disturbances to sourcing than production shutdowns in supply-side markets. In the first half of 2020, QIMA data shows that many U.S. and European businesses were able to sidestep pandemic woes in Asia by pivoting to suppliers in less impacted geographies. Even though China’s sourcing volume had sunk -75% YoY by February, overall demand merely slipped a nominal -4.5% YoY globally, according to QIMA data.

Con: demand-side shocks continue to be a pain point

However, on the other side of the coin, volatile consumer patterns continue to be a pain point that inhibit business volume. Demand for inspections and audits tumbled by -31% YoY in April and May of 2020 when shutdowns in buyers’ home regions sparked consumption instability. This pattern was mirrored in late 2020, with… (Read the full article on Industrytoday.com)

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