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“COVID-19: Re-evaluating our global supply chains”

COVID-19 has rocked the world, spurring governments, businesses, and individuals to re-evaluate every aspect of life. One area that has come to the forefront is the global supply chain.

For decades, companies have been sourcing goods and services from all over the world to take advantage of lower labor and production costs. The result has been longer supply chains and increased complexity. While this approach has been very profitable, it has also proven to be very brittle. The onset of COVID-19 has exposed just how vulnerable these global supply chains are to disruption.

As countries shut down their borders, companies struggled to continue sourcing raw materials and finished goods. Lockdowns and quarantine measures disrupted logistics and transport, delaying deliveries and creating bottlenecks in the supply chain. Companies who depended on a single supplier or country have been particularly hard hit, leaving them susceptible to shortages and price spikes.

The pandemic has demonstrated that a more resilient supply chain is needed. Companies must diversify their sourcing strategies to reduce their dependence on any single supplier, country or region. There is a demand for shorter supply chains that reduce the complexity of logistics and transportation. To achieve this, companies have to evaluate their sourcing processes and consider reshoring production in their home country, or near it.

Some companies have already started taking action. For example, Apple has taken steps to diversify its supply chain, by shifting some of its production to India and Vietnam. Similarly, clothing brands like H&M and Zara are investing in local production facilities in Europe to reduce their dependence on Asian suppliers.

The pandemic has also brought attention to the broader issues of sustainability, transparency, and governance in supply chains. Customers are becoming increasingly aware of supply chain risks and the environmental and social impacts of production. They are using their purchasing power to demand that companies prioritize sustainability, traceability, and ethical labor practices.

The COVID-19 outbreak has provided a wakeup call for businesses to re-evaluate their approach to supply chain management. Companies must accelerate their efforts to adapt to the new reality. A more resilient supply chain is the need of the hour, and companies who take action now will come out stronger in the long run.