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COVID-19 Middle Eastern Supply Chain
COVID-19 has caused a huge impact on people's lives, families and communities.
The Organization for Economic Cooperation and Development (OECD) warned that the coronavirus could cut global economic growth in half, with industries across the board facing a fallout. The global economy and international markets plunged as the coronavirus spread from China, the world's second-largest economy, to other countries in Asia, Australia, Europe, the Americas and the Middle East. Policies intended to prevent further spread of the virus, which include travel restrictions and quarantines, have unintended consequences of disrupting international supply chains, suspending business operations and shrinking revenues.
As the international response continues to develop, the Countries in the Middle East and North Africa (MENA) face a dual-shock, Coronavirus pandemic (COVID-19) and a collapse in oil prices.
As leaders and health officials track the virus and make decisions regarding its containment, supply chain leaders assess and plan for how the virus will impact their systems. No business can rest on their prior success and rely on a supply chain operating on outdated rules.
The impact on supply chain is twofold in Middle East.
1. Companies must closely monitor short-term and long-term demand and inventory to accommodate production loss in the wake of factory closures and economic slowdown.
2. Retailers are faced with inventory depletion as consumers stock up in preparation for potential quarantine or extended stays at home.
The urgent need to design smarter, stronger and more diverse supply chains has been one of the main lessons of this crisis. Technology helps increase their resilience to external shocks through the multiple efficiencies it brings. With the global economy under fire, it makes a strong case for innovative tech-enabled business models that address conventional supply chain inefficiencies.
Here are some critical supply chain measures that organizations can take to resolve the immediate challenges that the pandemic presents to supply chain workers, business partners, and operations.
Building Strong Supplier Network:
Most of the organizations that are facing massive supply chain disruption due to the pandemic are highly dependent on single geography or a single supplier for key products. It is important that the organizations try to gain maximum visibility to supplier's inventory, production, and purchase order fulfilment status.
Alternative Supply Sources:
Organizations must have alternative sources of supply in place that is spread across the geographies. Organizations should activate these secondary relationships as soon as there is any possibility of supply chain disruption.
Digitization:
Despite rapid advances in technology, the relationship between buyers and suppliers remains predominantly paper-based. Digitizing the buyer-supplier relationship is a fundamental element for building powerful supply chains and will make identifying and recruiting new suppliers far less time-consuming. With technologies like artificial intelligence and the Internet of Things, supply chains could quickly switch to alternative providers when regular suppliers face disruption.
Automation:
Automating processes, and ensuring the data tracking is in real-time, giving a full view of the inventory, labor allocations, inbound orders, shipping processes, and more.
While the disruption brought about by the COVID-19 outbreak is just the latest in a string of events affecting the current supply chain model, it is arguably the most disruptive. The current crisis is an opportunity to reset a system that has relied on outdated processes. Creating smart and agile supply chains is the key to building a global trade and investment network that's capable of weathering future storms.
According to Forbes, this could be the year that the traditionally quiet supply chain and logistics industry will speed up its drive to digitize, turning to autonomous drones, robotics, artificial intelligence, blockchain, the Internet of Things (IoT) and data analytics to ensure faster deliveries at lower rates.
Contributor: Michael Menezes
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About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.