Question

The relative importance of supply and demand during the Covid-19 pandemic is a key input into effective policy design. On the supply side, many businesses are struggling with understanding their supply chains including when and what goods will arrive. This, in turn can cause delays that can erode relationships and confidence in brands. On the demand side, both consumers and businesses have less cash in their bank accounts causing declines in sales of good and services.

Answer 1

Sol:

COVID-19 and the Supply Chain

• As identified cases of the COVID-19 increase, so too do impacts on global supply chain. Raw material shortage and delay in supply, shipping disruption and increasing cost and uncertainty about future volumes have all created major obstructions.
• No one can say with certainty when we will return to state of normal. It is incumbent on business leader and supply chain leaders to quickly get a full image of current state and build out processes to better anticipate future impacts. They must establish governance structure to dynamically manage and implement the contingency strategy to proactively navigate the turbulent days ahead.
• Industry professionals have worked to create efficiency, complex and supply chains. In all cases, narrowly focusing on efficiency has left supply chains highly susceptible to disruption that affect irrevocable harm in both short and long terms.
• Managing via supply chain disruption is nothing new and most organization are quite adept at doing so. However, few have experienced disruption to reaching and industry agnostic as this COVID-19 pandemic situation. As a result many organization find themselves woefully un prepared and under resourced.
• The regional manufacturers run lean on inventory and continually focus on developing inventory turnover regardless of source. This will be an effective working capital strategy but it is detrimental during time of pronounced supply chain disruption. During such event organization look for other sources but keeping up with shut downs and capacity reduction cause by the COVID-19 pandemic has been hard.
• The impact of manufacturing shutdown has been exacerbated by shipping disruption. Industries are affected in very different ways. Some of the industries are struggling to fulfill orders because of high demand particularly medical and food product manufacturers. Many other industries are experiencing a dramatic decline in demand. This is unprecedented time. The global situation remain dynamic. As organization have mobilized supply chain crisis management and best practices are emerging.

COVID-19 and the Demand

• After months of lock down, as a result of COVID–19 consumers are forced to shop differently. COVID-19 has changed every aspect of our daily life and consumer spending is no exception.
• Spending is down across all industries as lock down have restricted what we can spend money on, due to hotels, malls and shops being shut and also the air travel suspended. Consumer are spending less and saving more money.
• Equally the economic consequences of COVID-19 pandemic have meant the consumers are less inclined to spend more money with expecting their household income to continue to fall in coming months.
• In COVID-19 pandamic, time spent indoors however, has affect us to spend more on grocery and home entertainment. Some products of demand (e.g. medical equipment) is increased in COVID-19 pandamic at the same time many of the products demands are decreased (e.g. vehicle).
• When the demand increases that will give additional pressure on the whole supply chain but most noticeably for retailers who have holding stock, the fulfilment of their businesses. At the same time where there is potential for vast demand increases, it is important to assess the prioritisation of how products are packed, shipped and delivered.