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Jaden Goico
AP Seminar Period 2
Mr. Crossman
18 March 2022
Did the COVID-19 Pandemic Negatively Affect Supply Chain in Highly Developed Countries?
Introduction
The COVID-19 pandemic has directly affected the world with many major effects on economics, social life, environment, politics, scientific ideas, and ethics. Everyone in this world should care about how the supply chain affects them because it is creating the economy that is essentially supporting the average citizen of any country. The supply chain issues that have disrupted many people’s aspects of their lives with delayed shipping and items they can no longer buy anymore because of the supply chain. This immense pandemic has furthered the supply chain towards a downward spiral for many of the dominant countries. The COVID-19 pandemic had mainly caused the supply chain to slow down because of the disease’s restrictions between humans. But, many other factors are put into the supply chain disruption, such as changes in demand, lack of supply inputs, and changes in regulations regarding construction and installations in a way. While these companies are experiencing a sort of many issues, some companies in the pack are thriving at almost the highest which is the online sector of businesses. So, the pandemic has indeed negatively affected the supply chain in highly developed countries for the reason of changes in demand, lack of supply inputs, and changes in regulations.
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Revenue Impacts
As stated in the first paragraph, an obvious fact in our world is that the COVID-19 pandemic will forever influence us in that we cannot change what has happened in the past two years. First off, the revenue of many companies that weren’t essential during the early stages of the pandemic was hit with a sort of large economic slowdown, or so they thought. The economic slowdown was expressed through companies not getting enough sales as they did so before. This led to the change of demands that pierced many companies because of our mass movement ideology. For example, the hotel industry had a complete demand change towards an economic slowdown. This led companies to not be able to even supply to their decreasing demand at all. So, the economic impact on revenues had changed rapidly because of a virus that would affect all of us in the social aspect of our lives. It had altered the livelihoods of society through the unemployment aspect of each sector. This then affects the type of citizen who possibly is living under poor economic standards as is. According to a resource in the JSTOR, a well known scholarly database,“Some seven hundred thirty seven million people live on less than USD one dollars and ninety cents a day, many of whom live a hand-to-mouth existence and thus cannot skip working for a day”(Meester, Ooijens). This statement demonstrates the effects on the people in the world that cannot accept being laid off due to the pandemic. This goes to show how the pandemic forced change in the many aspects of the supply chain that had gone down to the social level of economic living.
Changes In Demand
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As stated before, we understand the supply chain was transformed due to the pandemic but, the change in demand was a large cause of this. According to a survey originated from the University Of Washington, “Of the responses, 67% reported that the top impact of COVID-19 on their supply chains was the changes in demand.” The change in demand is coming from the fact that people decided to shop at online stores rather than stores by foot as the risk of coronavirus exposure was high. This can depict as an image to us that there may be a new way of culture in the sense of buying items such as clothing. According to a survey originated from the University Of Washington, “Retailers have seen a sudden decrease in in-store demand, with a consequent increase in online shopping.” This evidence can support how the supply chain is being negatively affected from its old ways of brick-and-mortar stores. Companies in highly developed countries have experienced supply chain issues even with online shopping as well.
Operations Impact – Production
The revenue side of the pandemic is large and important, but some of these vast companies can withstand some of these effects economically. But, COVID-19 was not just able to slow down the revenue but also the production of products and get it to the consumer in a way. The nature of the virus and its way of being contagious had not allowed people to work together hand in hand enormously. So, to protect the masses of the world, they put us into lockdown. Through this lockdown, the very idea of social distancing, logistics, and sourcing is affected because people are at home and not working. The social distancing in some sectors specifically makes it impossible to work with a team that is, mostly, close to each other at all times in a facility. The logistics of bringing supplies from other countries was impossible because countries
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wanted to protect their own from basically other countries’ situations with COVID-19, or so they thought. The last factor is sourcing, which particularly means the availability of supplies. Sourcing is a grand issue because the availability of supplies to even create a company’s supplies were gone as well. So, with the negative effects on social distancing, logistics, and sourcing, we can conclude the fact that the production in this supply chain was put into this enormous obstacle. According to Greenstone,leading in sustainability software solutions, ““For examplacing their own employees into supplier businesses to ensure continued production at their required levels. However, it has also involved the extension and embedding of responsible supply chain practices that have been evolving over recent years.” This implies that companies have seen it get so bad to the point that employers are placed into supplier businesses rather than their original jobs. Another prime example of real-time companies experiencing so are food manufacturers. According to a resource in the Gale Database, scholarly and highly credible, “To meet this growing demand, food manufacturers may have to upgrade or renovate facilities to better address flexibility in producing different food items as well as to ensure best practices for employee safety are adopted. Improvements and overhauling of the food processing and manufacturing units will require more funding.” This statement can help to locate the fact that the very production facilities are in deep need of renovation while being deprived of their supply.
Operations Impact – Cooperation
The corporations in the pandemic were affected with yet another aspect of their companies, which was the cooperation between top officials of these powerful and large companies. The specifics in these corporations that affect are the transparency, flexibility, and
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bottlenecks. The transparency in these prominent officials between each other is the end-to-end visibility that takes much truth between sides to them to go into business. In-time delivery of the deliverer is required by each of these companies. Now the flexibility of companies had transformed because the supply chain had changed because of the slowdown of jobs and ability to run their facilities. The bottlenecks exemplify the actual and real reliance on the specific locations where the product can transport straight to the company to sell to their customers. It affected this because companies cannot control this specific reliance. An example of companies not showing cooperation between each other is through the prices of metals and minerals in which companies were supplying while no one was buying because an entire pandemic is taking place. According to the Clingendael Institute, an independent think tank and academy on international affairs, “Crude oil prices plummeted by 50% in April, while the coal price showed a more modest decline of 17%. Most mineral and metal prices saw a decline, although this varied strongly. Platinum saw the strongest decrease (23%), followed by copper and zinc (15%). Gold, instead, increased 15% as a safe-haven asset”(Hogenboom, Teijlingen). This evidence implies the fact that there were no buyers during this tough time. Another important example was on toilet paper, canned goods, and other staples, but there was high demand with low supply. The cooperation between companies was not working out for the reason that supply was not meeting the demand. According to EY, a multinational professional services network, According to the article, “Other sectors, particularly consumer products, couldn’t keep products on the shelves in the early days of the pandemic since toilet paper, canned goods, flour, and other staples were in high demand”(Harapko). After all, the root of this is the supplier who is creating the product. So the cooperation between the higher powers of the
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powerful companies is essential in guiding a company that is transparent, flexible, and being able to rely on the right people to supply every company.
Stimulus Connections
There are two specific stimulus connections that establish a link to this paper closely. The first connection stemmed from the stimulus material, “Ultra-Fast Fashion Is Eating The World” from The Atlantic, by Rachel Monroe. This stimulus material is tied to my paper on the fact that the consumer aspect is simply changing and relatively quick. This stimulus material states that clothing stores that are geared towards selling their products in the mall are losing large amounts of money because of coronavirus. According to this source, “Like many retail brands, Forever 21 was hit hard by the shift to online shopping. While other companies invested in their e-commerce platforms, Forever 21 doubled down on brick-and-mortar retail, signing leases in malls that were steadily losing foot traffic”(Monroe). The online fashion stores during the pandemic had thrived because it was as easy as clicking buttons to buy your favorite piece of clothing instead of physically going to the store. The second connection originates from, “The cultural evolutionary trade-off of ritualistic synchrony” from Philosophical Transactions of the Royal Society B, by Michele J. Gelfand, Nava Caluori, Joshua Conrad Jackson, and Morgan K. Taylor. This text is tied to my paper through the fact that in the pandemic, change in demand was a large part as to why some companies prospered while others failed. Changes in demand had occurred due to mass movements of people in which if a big figure bought an item, that item needed to be bought by the average person.
certain extent. The specifics on the positives is that the pandemic was able to pinpoint on the weaknesses of the supply chain in which officials of companies are able to resolve these issues. By resolving some issues in the supply chain from learning the weaknesses, the supply chain can now grow to new highs it has never seen before. The pandemic itself is hard to physiologically grasp an understanding of the idea that a virus has come to life and has claimed the lives of six million innocent people. Also, unemployment has now claimed the lives of many, economically, in the sense that it has caused many people to lose their source of income to pay for tasks like food and rent. Next, the operation impact in production has completely slowed down at the root of suppliers who create the mainstream products. The operation in the sense of cooperation between the sales associates and top officials was also a large factor because the supplier had to create a date in which the premier company would be satisfied with a good price as well. The pandemic has slowed every process that can be thought of in which the supply chain has negatively affected the economy of highly developed countries.