Corona Exit Strategy: a supply chain perspective
After 2+ weeks of lockdown of people and industry, industry supply chains have come to a halt and shortage of essential products are slowly appearing in retail. Containers are piling up in ports, shortage of reefer plugs at ports causing breakage of cool chains, expiring stocks at warehouses, distribution challenges through roadblocks and movement restrictions even imposed to the trade and logistics sector, creating shortages in retail in the weeks to come. Today, most of the airfreight is transported by passenger airlines. As passenger airlines have been put on the ground and cargo freighters are being utilized for medical shipments, the air cargo market has come to its knees.
As 50-70% of the SMEs have cashflow problems within 30 days, provide the industrial backbone of economies, the number of SMEs going out of business in the coming weeks will be exponential and will trigger a tsunami of supply chain disruptions.
Governments will have a mammoth task to fixing not only their economies, but also their broken industrial supply chains. Governments do not have supply chain expertise and understanding the extent supply chains are interconnected. The corona virus might have been the trigger, but the industry lockdown created a war zone. This requires a post-war national crisis cabinet with an advisory committee consisting of industry & supply chains experts and top academics to advise the national crisis cabinet.
This advisory committee should come together on a weekly basis to steer the national crisis cabinet on prioritizing government policies and actions in rebuilding their industrial supply chains. Their main task of the advisory committee is making the best decisions possible in removing supply chain bottlenecks and getting the industrial supply chains back to speed. The industry advisory committee will be pivotal in avoiding an economic depression.
It is all hands on deck now to get out of this, and full steam ahead Captain!