COVID-19 THAT DISRUPTS GLOBAL SUPPLY CHAIN

Article by:  Asst.Prof. Suwan Juntiwasarakij, Ph.D., MEGA Tech Senior Editor

The COVID-19 outbreak has been declared a pandemic by World Health Organization, causing huge impact on people’s lives, families, and communities. While no one knows just how long this will continue for, one thing that is that supply chain disruption is being felt across the globe and, given the interconnectedness and complexity of global supply chains, the disruption is likely to persists for many months.

Because of the level of uncertainty, many industry verticals will experience a slowdown. Demand for medical supplies, certain foods and other B2C goods has increased. However, workforce availability, production stops, and point of sale closures have caused tremendous negative impact to sectors such as manufacturing, retail, and transportation. On top of this, reliance on global supply chains adds further issues.   

Thanks to demand pressures, many organizations will be compelled to accelerate their digital transformation agenda in the near-term while others will likely shift their transformation efforts to a longer-term focus. Overall and across industries, greater investments are expected in cybersecurity, cloud, and collaboration services, AI/advanced analytics, automation, and IoT.

To stay ahead of the game, business leaders must respond and adapt to the crisis in a strategic and structured way. Ensuring safety of the workforce and maintaining continuity of operations must take priority. It is also critical to manage costs and ensure liquidity amid uncertainty in the short-term.

Beyond this, it is paramount to redefine future services, business, and operating models to adapt to the new reality. Organizations can digitally accelerate their recovery through the crisis and gain a competitive edge in the new normal by digitizing collaboration and operations, embracing digital-first business models, and boosting capabilities with partners and M&A

While many industries will follow the “gradual recovery” path seen in prior downturns, other markets will take unique trajectories given the extraordinary responses to this crisis. For example, telehealth or virtual care will be part of the “new normal” where demand has surged during the lockdown and will likely continue beyond it.

Similarly, the “sugar rush” path characterized technology sectors that have experienced a surge during lockdown but, in contrast to the “new normal,” are likely to see demand retract or return to long-term trends after stay-at-home restrictions loosen. “Rebound” markets will fall in the lockdown but spike in the recovery due to pent-up demand.