Under the economic crisis, Is the supply chain moving forward or backward?

Economic crisis, a familiar and unfamiliar word to all of you, but you know that an economic crisis has come quietly.

Affected by this epidemic, the country ’s economy has stopped advancing, enterprises and factories have ceased production, and many industries have been implicated, losing a lot of money. Although this is only a temporary impact, through this fuse, a series of reactions will be triggered.

First of all, the US stocks experienced three fuses in a short period of time, the stock markets of other countries were also in a downturn, and the relatively value-preserving gold and bitcoin prices continued to fall. Although we cannot predict future trends, this is not a good start.

If the economic crisis comes, how will the supply chain be affected? And how will it develop?

In the economic crisis, people have reduced unnecessary expenditures. Similarly, the expenditure and demand of enterprises will also decrease. Many overseas branches or factories have moved back to the headquarters one after another, because this can improve the flexibility of the supply chain. The definition is to maintain cost-effective delivery capacity in the face of large fluctuations in unplanned demand and is currently considered to be the most critical factor in global supply chain management.

According to the sources of risk in the supply chain, supply chain risks can be divided into two categories, external risks and internal risks.

The external risks of the supply chain include natural disasters, social risks, changes in the economic environment, laws and regulations, and so on.
Internal risks within the supply chain include market demand risk, procurement supply risk, order fulfillment and logistics delivery risk, internal operational risk, financial risk, etc.

The way to improve the supply chain can be from the perspective of the supply chain: choosing the right supply chain partners, inventory management under the supply chain, cost management under the supply chain, information technology and customer relationship management.

2 thoughts on “Under the economic crisis, Is the supply chain moving forward or backward?”

  1. The article is very interesting, because as you have mentioned, the stock exchanges all over the world do not stop registering losses. A few days ago the US stock market closed with the worst fall in its history since 1987, which far from generating confidence in investors, sows panic. On the other hand, we see that Trump and Johnson intend to intensify the production of sanitary material. The logistics sector is investing a monetary amount to supply the world with an unplanned demand. Who assures companies of the return on that investment?

  2. Interesting thoughts Wei! I do believe, from what I watched these days, that a big crisis is coming soon. I think the supply chain will be affected and companies will need to make a reconversion of it, because with the new times after Covid-19, everything is going to be similar to the problems we faced in 2008.

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