The supply chain facing Covid-19
In the context of the health crisis in which we are immersed, we have been able to observe many difficulties in the management of stocks and resources , the French market for masks, for example, did not support the exponential high demand due to the spread of COVID-19. In less than a week, the masks were out of stock throughout the territory, including in hospitals where the need had never been so high. Broken at several levels, the global supply chain has not been able to withstand this crisis, which is why the solution of a return to production as close as possible to the consumer, local and independent , has emerged as the only solution. viable to respond quickly to the various shortages. Hitherto unknown to the general public, the challenges of the supply chain and large-scale logistics are thus at the heart of the debate around a new global organization that is more responsible , more controllable and more sustainable .
The changing supply chain therefore stands out as a promising market because it is changing . The challenge for the next few years will therefore be to reinvent this model to avoid a total crisis in the event of a break in a link in the global supply chain .
- So, how does the supply chain react to the issues raised by Covid-19?
What is the supply chain?
The “supply chain” means “supply chain” . The supply chain corresponds to the management of the movement of goods or raw materials from their place of storage to their place of processing or sale. This is referred to as logistics and supply chain management. The goal is to manage the provisions (products) as well as the flows to guarantee the deadline as well as the cost of the products to the customers .
At the heart of this notion we find the supply chain manager without whom the management of this chain would not be possible. Indeed, he plans and implements the routing process. Above all, he sets up a very specific strategy and directs all production, supply and transport (flow) operations. The supply chain manager must be multidisciplinary and have many skills because he is the key element of a company.
There are many strategies for optimizing the supply chain . Indeed optimization allows to have a competitive advantage in particular and to keep its place in the breasts of the relations with its sponsors. Thus, the optimization of the supply chain makes it possible to:
- Control transport costs;
- Allocate resources and raw materials;
- Ensure customer stability;
- Save time;
- Stay competitive with other companies.
We therefore understand that the supply chain is essential because it guarantees a company’s competitiveness . Indeed, one of the primary tasks of the supply chain manager is to limit risks and prevent them. The goal is to be able to anticipate stock shortages in order to have the necessary supply.
The Covid-19 crisis has created arupturein the supply chains, regardless of the sectors. Indeed, even if the supermarkets remain open, consumption is down and purchases are limited. This crisis allows us to realize today that we are veryglobally dependent on each other. We can largely observe this interdependence on a global scale with the case of China and Europe. Indeed, in Europe, the difficulty of supplying Chinese products is causing an unprecedented crisis, while in China the drop in demand from Europe in many sectors is causing areduction in GDP of almost 80%since the start of the crisis. We understand here the notion of “Chain” inherent in the Supply Chain,if a link breaks, the whole system is affected.
But above all, this crisis has allowed us to understand that the supply chain sector and its market has many limits pushing it tocompletely rethink its model. Indeed, this crisis makes us rethink our model on a global scale and makes us individually aware of the current trade. Emerging from this crisis,mindsets will be differentand will highlight the importance of Corporate Social Responsibility but also ofresponsible routing.
Kuy Associés through analysis“The Supply Chain facing Covid 19 – Impacts and resilience actions”already takes stock of the situation and explains after the confinement of China that we did not take seriously the impact that this could have on the supply chain,China was at the heart of a third of the world’s manufacturing activities. This impact is multiple:
Automotive production is halted or idling. For example, automotive retailer Volkswagen claimed that 4 out of 5 factories were not going to reopen due to a delay in the entire supply chain process.
Production is stopped. Many factories are forced to close.
Difficulty finding alternatives and alternative producers.
Disruption of supply chains.
Need to rethink the entire supply chain model.
Opportunities to seize for the future
Knowing that more than 75% of companies feel a negative impact of Covid-19 on their activities , how can they bounce back?
In order to limit the risks and to adapt, it is necessary to set up a continuous circle between mobilization, reflection, analysis and configuration.
Several opportunities are inherent in this sector of the supply chain:
- Become more ecological and responsible by relocating industries to the local level. To precisely deal with this rupture and this sometimes impossibility of supplying, it is essential to make the supply chain work locally by bringing together the various stakeholders in this process. In this, it will be possible to reduce the risk associated with the supply chain being spread over several countries and guaranteeing access to provisions. We then speak of green supply chain and sustainable supply chain management.
- Innovate to adapt. The supply chain process will change, notably by allowing geographical proximity but also social proximity. This global confinement allows us to have time. This time is used by companies to develop and develop the systems internally and improve its skills.
In addition, we are not unaware that this kind of health crisis is likely to happen again. At the very least, many experts say that a crisis like this will happen every five years . Five years ago, we emerged from the Ebola crisis, what kind of crisis will we emerge from in 5 or 10 years? One thing being certain, we must be prepared for it and the supply chain sector must, in the future, be ready enough not to have to suffer the consequences of a possible next crisis . By promoting made in France and adopting more responsible behaviors , we will be ready.
In this desire to restructure and adapt the supply chain , ESCadrille can help you by identifying market opportunities and working hand in hand with you to build a viable and efficient approach for the future.
For more than 42 years, ESCadrille has been working with professionals in the logistics sector, which allows us today to offer the most suitable solutions for your project by thinking now about a sustainable operation adapted to the challenges of tomorrow.