The COVID-19 pandemic and its effects on the supply chain. Challenges that the health care systems face. Three waves syndrome.
Even though the COVID-19 pandemic that shook the whole world is subsiding, and its control is gaining momentum, we cannot relax. The rate of recovery and the speed at which everything is returning to its old ways is rather phenomenal. Remembering the first waves of the pandemic, we have to remember to learn from our mistakes. We tend to think more often of what it was like before the pandemic, however the challenges we faced that uncovered the week sides of our supply chain, we can make into our strengths. None of us is sure when the world will return to “normal”.
First wave. Supply chain disruption and country ‘s reliance on other. Until the Covid-19 pandemic, the main goal of supply chains was to properly balance inventory planning and reduce lost sales.
When the pandemic started, supply chains across the globe went into complete chaos.
With the first wave, the health care system supply chain disruption was caused by the lack of knowledge in terms of how to purposefully and rapidly react to the increase in demand of PPE’s. That highlighted as to how easy supply chains can be damaged. An increased demand in medicine and PPE’s, such as masks, disinfectants, gloves and robes, led to prices skyrocketing, longer delivery times and even goods deficit, with some countries even facing issues with scalpers. The deficit became obvious within the first six months of 2020. Inventory kept getting lower, and the amount of stock dedicated to the pandemic was either insufficient or was not accounted for whatsoever. In March 2020 WHO stated that in order to meet the growing worldwide demand, PPE industry has to increase production by 40%.
Supply was hampered by logistical problems, that were caused due to flight and travel restrictions that gradually became lockdowns and closure of manufacturing plants to try and thwart the spread of the virus. Due to the fact that that there is a global supply chain interdependence of COVID-19 related medical products, export restrictions caused significant damage. A lot of countries were dependent on big suppliers, such as China. If COVID-19 only affected China, the disruption to supply chain would not even reach 4%, however, it affected the whole world. In the beginning of the pandemic, the Us-Chinese trade war, had companies doubting the country, and yet still, the companies working closest with China, felt the lack of products right away.
Trust in one country led to the desire of not only getting rid of the limitation, but also a bigger interest of both Chinese and European players in diversifying and decentralization of their supply chain.