Due to the coronavirus crisis, manufacturing in China was at a near complete standstill for weeks. Whereas the country’s economy now seems to be picking up steam, the supply chain sector has yet to find a new normal, and intercontinental supply chains continue to face significant challenges.
In his presentation, Rainer Schmitz explained that many businesses are still confronting frequent supply chain disruptions and are investing considerable time and energy to mitigate the effects of Coronavirus – which, compared to the financial crisis, is affecting all levels of the supply chain.
Earlier this year when the pandemic broke out in China, many people were at home to celebrate the Chinese New Year. This caused significant complications for the situation of the workforce – and once the lockdown ended, it took about eight weeks for everyone to finally return to work.
The Chinese transportation market took a long time to return to its pre-crisis status. In January, the entire system was stalled due to a shortage of drivers. This was further complicated by the fact that each province had its own local lockdown rules and restrictions. In some cases, trucks could not travel between provinces without significant disruptions, which led to very long transportation times. Air and sea freight were also affected by these changes. Staff shortages and capacity bottlenecks in Chinese ports led to temporary disruptions in sea freight, while air freight experienced a stark reduction in flights. There are still very few intercontinental passenger flights, which has resulted in a loss of freight capacities for the transportation market. And, based on current predictions, the situation will not return to normal anytime soon.
With so many different disruptions and fluctuations, how can businesses keep their supply chains resilient and get back on track as soon as possible? Using a three-phase model, 4flow analyzed the Covid-19 crisis management of the supply chain between Germany and China. The results showed that, for some companies, a non-transparent, uncoordinated supply chain emerged from the crisis, whereas other companies had the current situation under control. “Companies that configure resilient supply chains for intercontinental supply with China now will have more success in the future. This means learning from the coronavirus crisis, recognizing structural risks, prioritizing, adapting and not falling back into old habits”, Rainer Schmitz explained.
You can find the German webinar recording and English presentation slides of “The post-coronavirus normal – Resilient supply chains with China” below:
https://youtu.be/8ssxbSUvhJ4
