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COVID-19 Impact on Global Supply Chains

Written By: Neil Ackerman 

The Covid-19 impact is an overall disruption of the mechanics of economies related to how we think about supply chain and logistics. Some examples is a food and medical impact. Of course, others are also experiences of a receding demand but these 2 offer good examples. For Pharma it is minimal disruption but for medical supplies it is not. Related to Pharma, longer term you may see impact on where generics and active product ingredients are produced and stored. However, you cannot just re-orient a supply chain and therefore time will tell if this actually happens. Related to food the value chain is around Staples (wheat, corn) and High Value (fish, meat, fruit). In the food space, it is a large labor market and logistics issue with the focus on the central position of top countries that produce both high value and staples. Time will tell if things are re-oriented or if we get amnesia and nothing changes.

The role of the supply chain leader is more important than ever given the impact of the supply chain in driving the success of modern organizations. In many respects, it can be argued that the future supply chain leader will be one and the same as the chief executive officer of the organization. Supply chain leaders today are at the cusp of having to oversee all aspects of the business of their organizations—from internal capacities and capabilities to external supply chain operations —and understanding how these serve evolving business models. We need to ensure we are developing the right supply chain leaders for the future—leaders who can deal with a high level of complexity, who understand different markets, both developed and emerging, and who can work efficiently and effectively across multiple cultures and nationalities. Specifically we will continue to see a focus in the end-to-end supply chain cost and transformation considerations, understanding global impacts in detail and having the experience to add value with a future state in-mind that is realistic and cost efficient.

Going forward supply chain delivery combined with artificial intelligence will revolutionize processes. Gartner predicts that by 2023, 50% of large global companies will be using AI, advanced analytics, and IoT in their supply chain operations, focused on delivery, in order to improve transparency in information flows, reduce friction, reduce costs in transactions, and enable companies to better analyze data, predict requirements, and optimize inventory levels.