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How can supply chains bounce back post-pandemic?

How can supply chains bounce back post-pandemic?

The rollout of coronavirus vaccines seems to signal that the world is slowly emerging from the pandemic. However, the health crisis aside, COVID-19 has left many other serious issues in its wake. One of the most significant to affect the construction industry is the disruption to supply chains.

The lockdowns in 2020 halted industry around the world, and while many people were hunkering down at home, consumer demand fell. As these lockdowns lifted and weary consumers emerged from their homes, demand exploded. The issue is essentially the contrast: supply chains are finding it hard to keep up after the lull last year.

More than just the bounceback

This has led to chaos for manufacturers and distributors who can’t rise to the challenge. Bouncing back to pre-pandemic levels and some is proving difficult, not just because of the spike in demand, but other problems including labour shortages. This is more pronounced in some parts of the world than in others. For example, in the UK, we’re now all too familiar with the shortage of HGV drivers Brexit has caused.

To add insult to injury, freight rates for goods coming from China to Europe have soared, which on top of the driver shortage, are leading to soaring prices. This, subsequently, impacts growth. Towards the end of October, China reported its third-quarter GDP grew by just 4.9% as industrial activity rose less than projected. Meanwhile, the UK’s GDP remains 0.6% below pre-pandemic levels.

How can we build resilience?

So the question remains: how can supply chains recover? And, indeed, how can they build resilience for the future? In an analysis published last year in the Harvard Business Review, reducing dependence on a single manufacturer or region was highlighted as a solution. For example, businesses should distribute their suppliers across the globe, as opposed to relying solely on goods from China.

Increased automation was also posited as another possible approach. As costs decline and acceptance rises, robotic production lines are becoming more viable than off-shored production. This makes the supply chain more local, and therefore, less vulnerable to disruption – essentially a similar proposal to spreading suppliers across regions.

Keep a global outlook

The economic turmoil caused by COVID-19 has revealed many weaknesses in global supply chains. Meanwhile, the impact of Brexit continues to reverberate, signalling a shift to more localised production. However, in the report from Harvard Business Review, the expert concludes with the statement that companies shouldn’t shy away from globalisation. Ultimately, companies that back away from a global view will be quickly replaced by those that maintain it.

Instead, it’s time to adopt a different way of working. New technologies and systems will likely hold the key to making supply chains more efficient. As a key barometer of growth, construction needs to step up and put these solutions into action. With more streamlined, smart approaches, we can kick construction back into action and get the economy moving again. Although the outlook is getting more optimistic, if the pandemic has shown us anything, it’s to expect the unexpected and never be complacent. 

 

 

 

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