With amusement I read which products are the most sought-after during the Corona-crisis: Apart from the “classics” like toilet paper and pasta, there are quite some interesting and surprising goods on the shopping lists. In France people are stocking up on baguette, wine and condoms. According to the trade journal “Inforetail”, wine is also a sought-after good in Spain, with 80% more sales than the week before, together with beer (60% up), olives (94%), crisps and chocolate (76 – 87%).
Most governments around the world reassure us that there is enough stock available in the market. Finland has never have really left the Cold War modus and has major supply storages on medication, food and weapons. Most countries have their individual formula to calculate their necessary stock based on annual consumption of a good and how long it would take to make it available for distribution in an emergency.
COVID-19 event has struck various industries, but not all to the same level of damage. During this pandemic we decided which industries are “essential”, such as food and medical supply. These still seem to run uninterrupted, as we can see more or less in our supermarkets and pharmacies. Industries such as auto, travel, consumer goods, electronics and retail have been profoundly impacted. The pandemic has caught companies and whole industries off guard, with a shockwave tearing through their supply chains and businesses (Source: EY).
We have developed supply chains which are lean and optimized, paired with just-in-time inventory and delivery. We find vendor concentration in relevant regions to reduce costs. Supply chains are very linear – so if there are any changes, the changes required are also linear and that takes time. According to EY the supply chain of the future need to be a network ecosystem. Disruption will not go away – it will be a new normal.
We don’t know what the next disruptive event will be. We don’t know either if during this event we can choose again which are the “essential” industries to be kept running. COVID-19 has shown us the weaknesses of our system and has given us choices. The next global event possible won’t. For this reason, we must take our lessons from this pandemic and get prepared for the future. We now need to do a supply chain risk assessment, develop alternative models with more flexibility and set up a Plan B for disruptive events. We depend on each other – so let’s cooperate by exchanging ideas and data to form a network ecosystem: from the regulators to allow flexibility to suppliers, the manufacturers, the major logistics companies and last-mile deliveries, to the consumer.
This is our chance to get ready for the next global, disruptive event.
Written by Nicoletta Moss
Images: Axel Ahoi; Max Böhme