The impact of Covid-19 on thesupply chain : Review of the effects of a pandemic crisis on the global supplysystem and analysis of its fragilities

University essay from KTH/Skolan för industriell teknik och management (ITM)

Author: Lorenzo Musella; [2023]

Keywords: ;

Abstract: The COVID-19 pandemic has created significant challenges for supply chains worldwide,affecting all aspects of the supply chain from manufacturing to distribution. The aim of this thesis is to show how the disruptions caused by the pandemic have highlighted the fragility of global supply chains, particularly in terms of logistics, manufacturing, distribution, and demand and propose a redesign of the supply chain to better withstand these events. Thepandemic caused significant disruptions to manufacturing operations globally, particularly in Asia where many factories shut down temporarily due to lockdown measures. As a result, there were delays in the production of goods, leading to shortages of critical components and materials, particularly in the healthcare, automotive sectors and microchip, as discussed in the last part of the thesis. Logistics was another area affected by the pandemic, withrestrictions on travel and movement leading to delays and cancellations of shipments. This disruption led to significant supply chain bottlenecks, particularly in the transportation of goods across borders. Distribution was also affected by the pandemic, with many retailers experiencing supply chain disruptions due to lockdown measures, leading to stock shortages of essential goods. The sudden shift to online shopping led to increased demand for ecommerce platforms, causing significant supply chain pressure, particularly in last-miledelivery. The pandemic has highlighted the importance of rethinking supply chains to build greater resilience and flexibility. Supply chain stakeholders need to revaluate their strategies to mitigate future risks, including investing in digital technologies, diversifying their supplier base, and improving visibility and transparency in their supply chains. Companies that had diversified their supply chains and invested in digital technologies were better able to adapt to the changing market conditions, while those that relied on a single source of supply or lacked the necessary digital infrastructure suffered significant disruptions. One significant consequence of the pandemic's supply chain disruption is the on going microchip shortage, which has impacted the automotive, consumer electronics, and healthcare industries. The shortage has underscored the need for greater supply chain resilience and the importance of investing in domestic semiconductor production capabilities. The COVID-19 pandemic has exposed significant vulnerabilities in global supply chains, highlighting the need for greater resilience, flexibility, and collaboration among stakeholders.

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