In just over a year, the business environment has changed dramatically. And when the COVID-19 pandemic subsides, the world is going to look markedly different.

What started as a supply shock in China in February soon became a demand shock as the global economy shut down — exposing serious weaknesses in supply chains worldwide.

Rarely have supply chains faced more complex, changing conditions than during the past year. As a result, the pandemic has highlighted the importance of being able to react and adapt to uncertainty.

The timeline of change

Many companies around the world have long been reliant on production and supplies from China and other low-cost jurisdictions in the Far East, such as Vietnam, Malaysia and Korea. So, when the pandemic first hit that corner of the globe, the ripples were felt worldwide.

A few months later, as Europe and other countries went into lockdown, panic-buying ensued, and basic commodities that should have been in abundance suddenly became scarce. Even as ministers insisted there were enough goods to go around, the situation brought home concerns about the sensitivity of global supply chains.

Which begs the question — will traditional supply chain models still be fit for purpose in a post-pandemic world?

Interconnected global supply chains may allow for cheaper products, but they are also more susceptible to change, meaning there is plenty of scope for things to go wrong. And sectors such as electronics and automotive, which rely on highly elaborate supply chains, have suffered more than most over the past year.

However, many of those embedded in supply chain management worldwide will tell you change was under way before 2020. The pandemic merely accelerated it.

Geopolitical stresses and an increased risk of trade wars in recent years were already starting to drive change in supply chain strategies. Equally, consumer demand had begun to have a significant impact on supply chain management.

The pandemic has put the ‘just-in-time’ model required to fulfil next-day delivery expectations under massive pressure. And many businesses are now realising global supply chains that rely on products moving thousands of miles before reaching customers are incredibly vulnerable.

Then there is the issue of climate change and sustainability. Many companies are becoming increasingly aware of the effect of supply chains on the environment and seeking more eco-friendly solutions.

Entering recovery mode

Many companies introduced short-term measures to boost inventory and continue supply during the pandemic. But now that lockdown restrictions are easing in some countries and businesses are entering ‘recovery mode’, many have started planning for the longer term.

Lately, there is a lot of talk about sustainability in an environmental sense. However, ‘sustainability’ can also mean many other things. Longevity. Reliability. Resilience against future shocks. The ability to adapt and deliver no matter what the circumstances.

So, if businesses want to build a robust and secure supply chain for the future, sustainability will need to be a key consideration.

In the near term, it is expected that companies will seek a more diversified supplier network to solidify a flexible yet cost-efficient supply chain. However, in the longer term, more drastic changes may be needed as businesses move supply chains nearby and digitise the process to create a more sustainable operation for the future.

Investment in technology will play a crucial role here — providing increased visibility over supply chains. For instance, warehouse automation and radio frequency ID tags can allow businesses to monitor goods at any point along the supply route. Advances in artificial intelligence and new technologies such as blockchain may also present opportunities for further innovation.

As we move out of the pandemic, one thing is certain: supply chain resilience and risk management are more critical than ever. And those companies that take proactive steps to secure their supply chains against future change will fare much better than those that do not.

As a sustainable electronics manufacturer, we are dedicated to maintaining a resilient and adaptable supply chain. Contact us today to find out more about our electronics manufacturing services.