Global Supply Chains in A Post-Pandemic World

When the deadly virus (would later be called Covid-19) struck China’s capital, Wuhan, no one expected serious economic shock, especially because people thought the virus would be gone in weeks. The case on the ground is different, as one-and-a-half years down the line, the virus is still hitting world economies, with more mutant forms reemerging. When the virus finally recedes (we don’t know when), the global supply chain will take a markedly different face. The pandemic exposed the weak points in the global supply chain, making it vulnerable to competitors. With this kind of shock and vulnerability, the global supply chain management needs to take steps to stay resilient while not weakening its competitiveness. Through a webinar meeting held on January 21st, 2021, Willy Shih, a Harvard economist, gave insight on how the global supply chain can recover from the shock without losing out on the competition. Keep reading to learn about these tips.

Unveiling and addressing the existing risks

the pandemic put the global supply chain in one of the major business risks- disruption. This risk comes about because many companies rely on a single supplier for the important materials that the company needs to use in the production process. What happens when the supplier’s country is caught in lockdown and no movement or flights allowed in? The supply chain is disrupted. For instance, while there are electron companies that make good phones, they may not play the jack of all trades, thereby producing all the screen protectors and the microprocessors that the phones need to run. They have to contract another company that plays the supplier, thereby providing the protectors. The problem comes when the supplier is a single company, which is caught in restrictions; interfering with the global supply chain. The other example involves companies that use nucleoside phosphoramidites to develop DNA- or mRNA-based Covid-19 vaccines and DNA-based drug therapies. Instead of relying on a single company from South Korea or China, there will be a need to diversify the sources for the smooth running of the global supply chain in the post-pandemic world.

Pinpointing vulnerabilities

as already mentioned, the covid-19 pandemic shocked the global supply chain management, exposing its vulnerabilities. In looking at the post-pandemic world global supply chain, the vulnerabilities must be identified and dealt with; else, the loopholes will only widen. The process of pinpointing vulnerabilities is not a one-and-done thing; it requires surpassing the first and second tiers and going beyond the trivial processes of checking distribution facilities and transportation hubs. Although this process is expensive and time-consuming, a company that wants to have its supply chain excelling must get out of the comfort zone and fill the loopholes. In doing so, the company categorizes the suppliers as a low, medium, or high-risk and uses metrics to gauge the effects of their absence in the supply chain.

Diversifying the supply bases

economist Shih pointed out diversifying the supply bases as yet another option for making the global supply chain in the post-pandemic world have a better look. Instead of risking the economy by putting all operations in a single low, high, or medium-risk supplier, there is a need to explore other available options and make the supply chain more resilient than before. The USA-China trade war has recognized this bare truth and has encouraged the BigTech firms to take a shift to ‘China plus one of going beyond china to spread the business strategy to the Southeast Asian countries like Thailand and Vietnam. There is a need for further geographic diversification, especially because of the natural disasters that hit these Asian countries. So nations need to diversify beyond the business giants that have been there and look for others who have equal potentials that have not been unveiled.

Holding safe stocks and intermediate inventories

while the need to diversify a company’s supply base is dire, sometimes it proves impossible or challenging to do so because of the unavailability of such a company to facilitate the diversification. In such a case, Shih advises companies to establish what part of the chain can accommodate how much extra stock in the interim and the form in which the stock can be held. While doing all this, the company must keep in mind that just like any inventory, a safety stock also ties up cash and can be a victim of the obsolesce risk. Before opting for it, a company needs to weigh all the disruption costs, including the lost revenues due to short supply, the time taken to offset the imbalance, and the exorbitant prices that companies will need to pay to counter the imbalance. By doing this, the company makes a wise decision regarding the safe stocks or the intermediate inventory.

Benefiting from process innovations

with all the shock and intensity that the global supply chain has faced, taking advantage of the process innovations will help it recover from the shock and stand on its feet in the post-pandemic world. When a business decides to relocate its supply chain to a different locality, it might think of asking the supplier to relocate as well or make some of the supply chain operations in-house. There is a golden opportunity that the company can take advantage of and make massive improvements in either of these. When you choose to transplant the operations or set up new ones, these too can create opportunities for improvements. This owes to the fact that you can revisit the design routines and make necessary changes where needed. The changes can turn out to be for the good of the company’s supply chain. Sometimes the assumptions that underpin your original process may need repurposing, and this is just the time to do it and improve the face of the global supply chain in the post-pandemic world.


The Covid-19 pandemic has affected all areas of life, including the world’s economy and the global supply chain. The pandemic exposed the vulnerabilities and the loopholes in the global supply chain, which, if not addressed, can c=keep it losing out on revenue to the competitors. This article shared tips on what the current chain looks like and how to make it better in the post-pandemic world.