Managing Supply Chain Risk and Uncertainty in the Post-Pandemic Era: A Strategic Perspective

Introduction

Supply chain management not only lies at the heart of the organization but also transcends its boundaries outside the organization. It is perhaps the premier operations management strategy for companies seeking to establish and maintain competitive advantage in today’s global marketplace. Supply chain management is important because businesses have come to recognize that their capacity to continuously reinvent competitive advantage depends on their ability to look ahead of their channel partners and leverage their internal capabilities. Channel partners assist companies to generate innovative ideas and resources necessary to assemble the right blend of competencies that will resonate with their organizations and the wants and needs of their marketplaces. Today, the core competency an enterprise may possess is not to be found in a temporary advantage it may hold in a product or process, but rather in its ability to continuously assemble and implement market-winning capabilities arising from collaborative alliances with their supply chain partners. Creating a customer is a major task of marketing. But delivering the goods to the customer created is the most critical task. Global markets are expanding beyond borders, and this is what is re-defining the way demand and supplies are managed. Global companies have been prioritizing their sourcing products from markets across continents, to keep the cost of manufacturing down. There has been a trend among companies that to be competitive, they keep looking out to set up production centres at places where the cost of raw material and labour is cheap.

The focus on efficiency in the process brings whole range of functions, systems, new processes, development of sophisticated techniques and methodology. As we think of raw material supply, coordination among functions such as production, procurement, vendors, suppliers, finance, and operations come into play. Distribution makes us think of competitors, marketing, sale, customer service interface. Finance comes into play for both. According to Martin Christopher, the definition of supply chain management is:

Supply chain management means systematic supply of raw material to the organization and efficient delivery of finished products to the customers. Volatility and uncertainty in the market points to the role supply chains play in the overall success and valuation of global corporations. Today supply chains are very complex, with large number partners spread across multiple countries and geographies as part of an intertwined global trade ecosystem. The objective of our study is to understand the various types and sources of supply chain risks and uncertainties post COVID-19 outbreak and the strategies adopted by global firms to meet the challenges associated with them. The present research has used the review of research articles and reports published by industry experts and research consulting firms in the year 2020 and 2021. Cases from different industries have been used to conceptualize supply chain disruptions and resulting action initiated by those select industries to mitigate risks and vulnerabilities.

Background

In 2003, during the outbreak of the severe acute respiratory syndrome (SARS), China accounted for just 2 percent of global GDP. But, now in the present scenario of COVID-19 pandemic, China’s share of global GDP has increased to almost 20 percent. The unprecedented supply chain disruption caused by COVID-19 has had severe operational and financial consequences like demand drops and surges by segment, supply shortages, inventory challenges and reduced productivity. Companies across the globe can use this opportunity to discover where investments are needed, reform the supply chain function, and reposition the organization for growth once economies bounce back accordingly. A recent report published by IBM on “COVID-19 and shattered supply chains”, states that the pandemic has exposed the vulnerabilities and fragilities in global supply chains across most sectors and industries and has led have resulted in huge losses as well as complete shutting down of various companies. Capgemini Research Institute (2020) reported worrying findings in the wake of COVID 19 while describing supply chain resilience. Initial supply-chain losses were largely due to restrictions imposed by several countries (Guan et al., 2020).