Impact of coronavirus on supply chain management

Coronavirus , declared as a pandemic by the World Health Organization, has disrupted every aspect of our lives, work and social fabric. As the virus continues to spread across geographies, it has wreaked havoc and caused significant damage to the global economy. Economic activity has slowed down, and it has sent global markets in a tizzy.  The global supply chain has been paralysed, cargo movement has been erratic,  and it has had spillover effects across industries.

Governments across countries have issued advisories concerning social distancing and encouraged businesses to  explore remote working opportunities leading to an unprecedented rise in in-home consumption. Few state governments in India have enforced sections of the law to ban mass gatherings. Supermarkets, especially the ones housed in malls, are subjected to lockdown as the government has issued explicit orders regarding lockdown of malls, pubs etc. This has led to a phenomenal rise in the number of people ordering food supplies, daily essentials, toiletries and protective gear online. Organized retail has been adversely affected by the lockdown order of the state governmets and has forced people to buy stuff online.

Supply-demand inequity is posing a severe problem and suppliers of essential commodities are finding it extremely tough to keep up with the demand. Suppliers are also grappling with storage and inventory issues. Capacity constraints and demand unpredictability are hampering their decision-making process. No one knows for sure, how long this crisis is going to last. Making purchases, therefore, becomes a tricky exercise.With the rise of infected cases and the spread of the virus, some people are panicking and hoarding goods and supplies. Though retailers are coming down hard on these profiteers who like to hoard items in times of crisis, the supply and demand imbalance is yet to be made even.

Factories are working round the clock to keep pace with market demand for high priority goods. Optimization of inventory and putting reasonable restrictions of purchase of items such as toilet papers, wet wipes, protective masks, food grains and perishable items are needed to ward off the unnecessary scarcity of goods.