Covid-19 Implications on Supply Chain Businesses

By Nishant
8 Min Read
Supply Chain Businesses

The COVID-19 crisis has wreaked havoc on the planet. It has not only taken many lives but has also caused widespread economic instability. Every day we hear reports of massive layoffs and pink slips being handed over to a large number of people. Salaries are being slashed and people are unable to report to work. Those industries that are acutely affected by the pandemic are seeing gruesome times.

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One of them is the supply chain industry. This is because the supply chain industry isn’t lucky enough to allow people to work from their home, as is the norm in other industries. Trucks, tempos, trains, ships, planes, and every other kind of transport vehicle have been virtually stopped due to government directives. Transport routes – air, water, and land – have been barricaded in the ongoing lockdown.

We are living in a world of contradictions because some questions don’t have suitable answers. For example, on one hand, data scientists are using advanced machine learning algorithms to forecast the rising trend of the COVID-19 pandemic and how grave the situations are going to be in the coming times. And on the other hand, economists are foreseeing economic downturns due to low labor rate participation.

The SME sector which employs more than 100 million people, about 40% of India’s workforce, is crumbling. This is because they don’t have enough reserves to support the financial interests of their employees when all economic activities have halted. Industry leaders are worried about the future, especially of sensitive industries such as the supply chain industry that has been crippled due to the pandemic. This article talks about COVID-19 implications on Supply Chain Businesses and how Enterprise technology can help them breathe fresh air.

1.Transportation of only essential products

To curb the spread of the virus, the government imposed lockdown across the length and breadth of the country. This meant a complete restriction on the movement of people and goods from one region to another. The move has been applauded by the international community and the government has received various accolades but it has given rise to a deep economic chasm. L

uxury businesses, the tourism industry, and the aviation sector have been the most hit. Coincidentally, all these industries are heavily dependent on supply chains for functioning optimally. But the crisis has been so grave that they are on the verge of closing down. OYO, the leading name in the hospitality sector has handed pink slips to the majority of its employees across the world.

Airline company GoAir has asked its employees to work on a rotational basis where they are expected to report for less than 30 days a month and will be paid only for that duration. Restaurants, hotels, and cinema theaters have also ceased their operations in the current lockdown. The construction industry has been massively hit because raw materials cannot be transported, which has resulted in the mass migration of laborers to their home state. Only essential items – food and beverages – that are required for survival are allowed to be distributed among the masses. This has exacerbated the already deteriorating condition of supply chain businesses.

2. Limited Remote Working opportunities

The COVID-19 pandemic has made self-quarantine mandatory. Scientists and virologists have suggested that there is no better way to save yourself other than complete isolation from the outside world. Thus people are locked inside their homes. Those who are venturing out are being fined or locked behind bars. This has been a matter of grave concern for businesses because they can’t run without their workforce.

Certain industries, such as IT, have been lucky as they have asked employees to work from their homes. Remote working has emerged as a formidable solution to self-imposed quarantine. But, it’s not of much help in certain sectors where physical presence is mandatory; the supply chain is one of them. Manufacturing, which is a part of Supply Chain, has partly benefited from automatic systems and machines as they take care of purchasing raw materials well in advance and manufacturing products-in-demand without any human interference.

But as far as delivering products is concerned, businesses are facing problems. Enterprise technology – ERP systems and CRM systems – have emerged as a solution. The following points explain how enterprise technology helps supply chain businesses to remain afloat:

  • ERP systems keep a list of secondary vendors so that you have myriad options in case the primary vendor is unavailable
  • ERP systems prepare invoices online without the need of a human
  • ERP systems help repurpose the factory to produce essential products – hand sanitizers, hand-wash, soaps, masks, PPE (Personal Protective Equipments), etc.
  • ERP systems forecast what products are in demand
  • CRM systems allow geographically dispersed teams to coordinate effectively
  • CRM systems help cement a strong bond with clients and increase customer stickiness

3. The threat of catching the virus

One of the major threats faced by supply chain businesses is their susceptibility to the COVID-19 virus. After railways, most of the raw materials, finished products, and essential products are transported through roads. Trucks and lorries play an important part in doing so. But this is where things can take a U-turn. Truck drivers and other supply chain staff are highly susceptible to the virus.

This is because they have to load and unload crates, packets, envelopes, baskets, protective sheets, and encasings that come in contact with multiple people throughout the supply chain. Moreover, they have to travel long distances to transport it from one place to another. This results in a high risk of coming in contact with the virus and ultimately spreading it to others. This is where supply chain businesses need to think of investing in new technology. Drones can be very useful in such scenarios.

They can move raw materials or manufactured products from source to the destination without the involvement of humans. Also, since they use air as a medium of transport, they don’t need to waste time in long traffic jams and can reach on time. This will provide an additional competitive advantage to supply-chain businesses for which they can charge more from their buyers.

In the entire human history, there hasn’t been any virus as contagious as the COVID-19. It has spread across every nook and cranny of the world and is showing no signs of stopping. Unless we have a fool-proof vaccine, the world will remain inside four walls. Supply chain businesses are feeling the heat but things can change for good if they plan to invest in enterprise technology and drones.

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By Nishant
Nishant likes to read and write on technologies that form the bedrock of the modern-day and age like machine learning, data science, AI, and robotics. His expertise in the content marketing audience has helped grow countless business opportunities. Nishant works for Sage Software Solutions Pvt. Ltd., a leading provider of ERP Software and CRM software to small and mid-sized businesses in India.