The COVID-19 epidemic has become the primary cause of disruption in different organizations worldwide. With the radical virus drastically changing the macroeconomic outset of the world’s economy, companies are left with only devising strategies to survive this onslaught.
The outbreak has also neutralized supply chain practices since organizations are left with handling crises with no guarantee of continuity. Let us discuss the disastrous challenges faced by enterprises with the current situation today.
Looking back at the initial days of the outbreak, customers were stocking supplies in panic. The result affected the retail sector’s inventory significantly, given that they were short on supplies in no time. Who is to say that something like this cannot happen again? Thus, organizations need to devise a safety stock inventory for rainy days. In other words, they need to forecast the demands and needs of the consumers to tackle the uncertainty that lurks around in these times.
Some providers have come to an abrupt stop due to the COVID-19 pandemic. Businesses, such as restaurants, will not be providing services for some time in the future. Thus, to ensure that the distributors survive this epidemic, they must switch their clients to resume productivity. For instance, different startups deliver food from their homes and can be the next set of clients for the distributors.
High demanding products
If COVID-19 has reduced the demands of many products, it has also increased the claims of some essential commodities. Products such as soaps hand sanitizers all have increased usage. But all of them are minimum supplies. Additionally, the demands for these products continue to grow overall, significantly since people are changing their habits drastically.
Thus, if suppliers want to continue to provide their services, they need to adapt and change to the situation. In other words, they need to look for customers to whom they can supply their products, depending on the requirement of the public. Moreover, these enterprises need to tweak their business objectives to keep them active during these challenging times.
Considering the present economic turmoil at the hands of the dangerous virus, the return to total production can be robust. Moreover, regional supply chain operations are at a definite risk since they continue to be forced to reduce their services. But the current supply chain situation requires preparedness and resilient practices that can withstand reducing production size. Nonetheless, such methods aim to ensure that the business keeps running presently. Another goal is to ensure these enterprises are in battle-ready mode after the locked down is lifted.
Banking and finance – How to resolve the adverse situation
The advent of global pandemic emergency, related actions, and limitations that public administration implement affects all human activities. It disturbed the economy, businesses, and household operations.
The declaration of an epidemic emergency and the emergency measures and restrictions implemented by the public administration shall not impact the economy, businesses, and households. To mitigate the adverse effects of this situation, banks are working on short- and long-term solutions to relieve borrowers.
16 March 2020 The Polish Bank Association announced the “Communication on aid measures taken by banks connected with the coronavirus pandemic COVID 19”. According to this communication, the package proposed by the banks includes several solutions addressed to both businesses and individuals, including the following:
- The banks shall facilitate the deferral (suspension) of the repayment of interest and capital installments for three months,
- For entrepreneurs who were creditworthy at the end of 2019, their financing expires in the coming months and has been affected by coronavirus effects. Banks will renew the existing funding for six months,
- No fees will be charged for the motions covered with the above measures. The banks will enable filing those motions without extensive formalities, and remotely,
- Similar rules will be applied by leasing and factoring companies that are within groups of the banks.
How to mitigate these supply chain disruptions?
- Build a supply chain risk management governance framework and link underlying processes and key risk triggers to a business continuity plan
- Collect internal data on disruptions
- Leverage external data and models
- Identify the most prevalent supply chain risks.