Realignment of the Global Supply Chain After the Corona Pandemic

Thesis (M.A.) , 2021 , 54 Pages , Grade: 2

Business economics - Supply, Production, Logistics

The COVID-19 virus has wreaked havoc on global trade and investment on a massive scale. As more countries instructed citizens to stay at home, multinational corporations suffered an initial supply shock, followed by a demand shock. Governments, organizations, and individual consumers found themselves unexpectedly unable to obtain essential products and materials, forcing them to confront the modern supply chain's fragility. Organizations must make difficult
decisions faster and have less human participation; therefore, emerging supply chain management solutions are overhyped. Leaders in supply chain technology must be aware of future dangers and possibilities. My study starts with a survey to identify the significant risk most companies face due to this corona pandemic. I have tried to create a model to overcome the Risk and prepare for any disaster that may occur in the future.

Contents

Abstract

List of figures

List of abbreviations

1. Introduction
1.1 Motivation
1.2 Objective and research question
1.3 Structure of the thesis

2. Literature review 1

3. Supply chain risk and Covid-19
3.1 How covid-19 affecting the global supply chain
3.2Risk and uncertainty in global supply chains during Corona pandemic
3.2.1 Sources of risks and uncertainty in global supply chain
3.2.2 Different supply chain risk
3.2.3 Impact of covid-19 on the global Pharma supply chain
3.3 Labour shortage and production slowdown
3.4The unemployment rate in Germany
3.5 Air-freight cargo disruption
3.6 Delivery delays during the covid-19 pandemic
3.7 Online questioner

4. Results
4.1 Online questioner
4.2 Risk Management strategies

5. Discussion

6. Conclusion

Bibliography

Acknowledgment

First, I need to thank Almighty and my parents for making me write this thesis. Then I want to thank my professor Prof.Dr. habil. Rainer Lasch, Business Studies and Logistics chair from TU Dresden, provides excellent guidance and information. He helped me understand the concept of the supply chain after the Corona pandemic. He was instrumental in helping me choose relevant markets for my thesis and evaluating my thesis progress. I am also thanking the supply chain teams of the different organizations who participated in my survey. I wish to thank all Belectric GmbH Dresden and Gorillas Technology Dresden employees for their support in completing my work.

Abstract

The COVID-19 virus has wreaked havoc on global trade and investment on a massive scale. As more countries instructed citizens to stay at home, multinational corporations suffered an initial supply shock, followed by a demand shock. Governments, organizations, and individual consumers found themselves unexpectedly unable to obtain essential products and materials, forcing them to confront the modern supply chain's fragility. Organizations must make difficult decisions faster and have less human participation; therefore, emerging supply chain management solutions are overhyped. Leaders in supply chain technology must be aware of future dangers and possibilities. My study starts with a survey to identify the significant risk most companies face due to this corona pandemic. I have tried to create a model to overcome the Risk and prepare for any disaster that may occur in the future.

List of figures

Figure 1. Real-time on border crossing delays for European nations in hours (Percentage of supply chain disruptions due to coronavirus, 2021)

Figure 2. The current worldwide cases and death due to Covid-19 (Data, 2021)

Figure 3. Global supply chain affected by different stages of the pandemic

Figure 4. Case per a million of the population in selected European countries (2021)

Figure 5. Forecast of COVID-19 Impact on Trade and Growth (McKenzie, 2020)

Figure 6. The expected loss of different industries due to the Covid-19 pandemic

Figure 7. Quarterly industry warehouse vacancies dip (Shefali Kapadia, 2021)

Figure 8. Quarterly industry warehouse rent raise (Shefali Kapadia, 2021)

Figure 9 Merchant demand for APIs (EFCG, 2021)

Figure 10. Manufacturing site of API's for U.S market by country or region (Pharmalex, Resilience of Pharma Supply Chains and the Impact of Covid-19 Pandemic, 2021)

Figure 11. Labor crises during Global financial and corona crisis, a comparison (look, 2020)

Figure 12. The unemployment rate in Germany (commission, 2021)

Figure 13. Figure showing the response of Logistics experts of different organizations.

Figure 14 Transportation disruptions and risk management for the revival and recovery ofthe firms from the COVID-19-like pandemic crisis in the future.

List of abbreviations

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1. Introduction

The COVID-19 pandemic disrupted life on social and economic grounds. Among altered types of disasters categorized by the World Health Organization (WHO) (University, 2020), epidemic outbreaks have proven destructive to human lives and economies. The world has been throwing down the gauntlet several times by great pandemics, which left long-term effects on society, businesses, operations, and the supply chain(S.C). The industrial setups, which are considered the backbone of any country's economy, often face full or partial closure in such circumstances. The supply chain delays were also a significant problem. The real-time border crossing delays for 28 European nations are shown in figure 1.

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Figure 1. Real-time on border crossing delays for European nations in hours (Percentage of supply chain disruptions due to coronavirus, 2021)

In the commercial context, disruption affects how institutions operate and communicate, gaining or losing customers. For business owners, especially in the manufacturing sector, supply chain disruptions have had a cascading effect, affecting sourcing, logistics, manufacturing, distribution, and aftermarket services. Naturally, it takes time for things to stabilize and return to normal. The unmatched outbreak, COVID-19, was recognized from Wuhan's wild food market and reported in late 2019. In the initial phases, China was affected harshly and had to reduce economic and industrial activities and instigate several lockdowns in poles apart. The dependency of the world supply chain on the world's factories was at considerable risk, and activities decreased pointedly. After a short time, cases existed globally, and it became a global emergency. The sprawl of COVID-19 affected all the nations or territories as of June 6 2021, with 173,022,752 active cases and 37,226,24 demises. The current cases and death due to Covid-19 are shown in figure 2 below (COVID-19, 2021).

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Figure 2. The current worldwide cases and death due to Covid-19 (COVID-19, 2021)

The epidemic outbreak has already disturbed commercial operations on a large gauge. Therefore, early identification of disruptions and quick remedial actions can allow industries to lower the impact of present and upcoming shocks. The global supply chain affected by different stages of the pandemic is shown in figure 3.

Response

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Figure 3. Global supply chain affected by different stages of the pandemic Many industrialists had to close their manufacturing operations fully, and some reduced them to the lowest capacity. The supply chain operations linked with fulfilling supply and demands were troubled due to airport bans because of restrictions by the government (Hedwall, 2020).

Even though this is not the first plague to occur, it occurs in a contemporary context. For example, such a vast population worldwide. Demand for vast volumes of products in the market has put massive pressure on the F&D business. Consumer and purchasing behaviors have been heavily subjective to the COVID-19 pandemic. Fluctuating trends in this space have led to unexpected and unparalleled shocks in the industry. The epidemic has caused a shift toward a more significant need for efficacy in production amidst the long-term authenticities of staff capacity shortages and an unpredictable regulatory environment. A chart showing the 3rd wave of the covid-19 pandemic in Europe is shown in figure 4 below.

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Figure 4. Case per a million of the population in selected European countries

1.1 Motivation

COVID-19 (SARS-CoV-2) pandemic has altered the way businesses conduct their global operations, not just in terms of new trade constraints but also rapid changes in the digital situation regulating the flow of goods across borders. These are the exceptional cases that put our business and supply chain operations at tremendous risk. This is demonstrated by long-term disturbance, ripple effects generated through propagating disruptions, and a highly uncertain environment. Nevertheless, minimal research works have reported approaches in this direction in a structured manner (Hassan, 2021). These shockwaves have raised questions about critical global supply chain management practices like identifying supply chain sustainability, viability, and risk. To develop an integrated conceptual framework of the supply chain, operations management sustainability, preparedness, and resilience readiness, through this study, I am trying to formulate strategies that help realign the global logistics and supply chain by identifying different risks.

1.2 Objective and research question

After the study, you can find answers to these research questions. What is the global Supply chain risk associated with the corona pandemic? (Camarena, 2020) How can the global supply chain realign? What all are the strategies necessary for the realignment of the global supply chain? How successful be the realignment of the global supply chain in the present scenario? (Maria Camila Moreno, 2020)

1.3 Structure of the thesis

The research was planned in the following manner. First, data collection is done with different online newspapers, WHO websites, and government websites of varied nations are routinely studied to gather different data regarding corona cases and related deaths worldwide. An online poll was executed to learn more about the supply chain risk that most organizations faced. The poll was distributed to supply chain officials from several nations, as well as sure business owners. This research is limited to newspapers and websites in the English language to easily compare content and use text mining techniques without relying on potentially poor translations. Based on that online poll, the long-term and short-term strategies for the realignment of global logistics are cited.

Platform

Typeform is the platform I used to create the online poll, which is easy to handle and user-friendly. The poll created using Typeform is shared with different business executives, which was easy to fill. I tried to create a strategic model to ease the corona pandemic's supply chain problems by considering those answers.

2. Literature review

"Supply Chains are a set of different units (organizations or persons) intimately involved in the upstream and downstream movements of products, services, finances, and information," according to (Mentzer, 2001). From a supplier to a client," By optimizing S.C. in the most effective and efficient ways, S.C.M. comprises the active management of such activities and connections to gain a sustainable competitive advantage and maximize customer value. Organizations must manage their operations by carefully planning, scheduling, and managing S.C. activities to be effective. To avoid S.C. disruptions and assure risk mitigation, the S.C.M. literature focuses on three critical techniques for the success and future of SC: R.R.S.

Securing and Müller define sustainable supply chain management as "the organization of material, info, and capital flows, as well as cooperation among organization along the supply chain while taking aims from all three dimensions of sustainable development, i.e., economic, ecological, and social, into account, which are derived from client and stakeholder requirements" (Seuring, 2008). Sustainable S.C.M. firms often have linked financial and environmental goals, which leads to incorporating sustainability into every area of their business, S.C., and partnerships, protecting entire S.C. from commodity traps and increasing financial value to the focal firm and suppliers.

Most organizations have outsourced and extended many manufacturing and S.C. activities resulting in a high reliance on worldwide suppliers and increased complexity, making them particularly sensitive to S.C. interruptions (Bozarth, 2016). S.C. disruptions can be caused by external events beyond the firm's control, such as natural calamities like the COVID-19 pandemic and internal events within the firm's control, such as missing contingencies or mismanagement.

The "anticipated outcome of an uncertain event" is what Risk is defined as. The possibility and effect of losses and the speed and frequency of losses are critical risk factors in global S.C. (Manuj, 2008). Supply and demand uncertainties are two of the most prominent external hazards related to S.C. disruptions. On the upstream/supplier end, supply uncertainty refers to the "risk of disruptions in the flow of components they require for their internal operations." Critical considerations are the quality of acquired items, the predictability of estimated delivery periods, and the reliance of goods on unanticipated shortages or price increases. Demand uncertainty refers to the Risk of a considerable and unpredictably fluctuating demand for goods, which firms confront on the client­side due to increased supply and demand uncertainty, market globalization, and shorter product and technology life cycles (Rao, 2009).

In the literature, global supply chain risk management (SCRM) is often defined as the identification, assessment, control, and monitoring of S.C. risks, as well as the implementation of appropriate methods to lower one or more of the risk dimensions (Wieland, 2021) (Manuj, 2008).

The cause-focused SCRM idea is frequently linked with the practice of S.C. resilience, which is oriented on overcoming risks regardless of the cause to ensure that all incidents are covered in complex S.C. The "adaptive capability to plan for unforeseen occurrences, respond to disruptions, and recover from them by preserving continuity of operations at the desired level of connection and control over structure and function" is what S.C. resilience is all about (Ponomarov, 2009). S.C. resilience is defined as "the desirable balance between vulnerabilities and capabilities, where it is claimed that organizations will be the most profitable in the long term," according to a paradigm created by (Pettit, 2010).

Sustainable S.C.s are said to be more robust and less vulnerable to risk in the event of unsettling events (Namdar, 2017). We'll see if the coronavirus issue is driving long-term S.C. or if it's dropping owing to (short-sighted) cost-cutting opportunities as part of this study.

Due to growing business uncertainty and vulnerability, supply chain risks have received more attention in recent years in S.C.M. research (Zsidisin G. A., 2003). As a result, business practices such as outsourcing, production, supplies, and inventories have significantly decreased, making supply chains more susceptible to disruptions due to business risks (Craighead, 2007). This is related to upstream and downstream supply agents, making supply chains more sensitive and complicated than ever. To endure and thrive, businesses must strategically work with their major suppliers and consumers. Based on their severity, S.C.D. Risks have had a significant impact on the operational and financial performance of the organizations.

The COVID-19 is currently affecting many companies' lean and globalized business architecture. Due to a pause in production and logistics activities, the pandemic impaired supply chain resilience and made businesses vulnerable to S.C.D.s. Consumer demand has slowed as a result of the lengthier lockout, as has demand for labor, supplies, and delivery, negatively impacting the economy, without risk mitigation inventories, backup supply subcontracting capacities, and transport infrastructures, robust channel distribution systems, and flexible production technologies (Araz, 2020). Due to S.C.D.s in affected locations, the COVID-19 has affected roughly 94 percent of Fortune 1000 enterprises. Due to the pandemic-induced protracted lockdown, it is necessitating government assistance to counteract the impact. Risk mitigation inventory, subcontracting, backup supply, transportation apparatus, and digital monitoring and visibility systems are all ways to achieve S.C.R. (Dolgui, 2020).

The COVID-19 pandemic has not been restricted to a single location or period. Manufacturing, distribution hubs, logistics, and markets have all had an impact on supply chains. Many corporations have gone bankrupt due to the COVID-19- induced lockdown, economic shutdowns, and S.C.D.s. Many well-known American corporations, such as Sears, Hertz, and J. Crew, have encountered severe financial difficulties. Aside from manufacturing, the epidemic has wreaked havoc on the airline, tourism, and hospitality industries. For example, due to the severe COVID-19-induced constraints, Fiat Chrysler Automobiles NV and Hyundai have temporarily halted production. This has had knock-on implications in the sector, necessitating robust SCRM methods, including valuable data and more digitally enabled supply chains to improve response quality (Ivanov, 2019).

The COVID-19 pandemic's impact on S.C.D.s has yet to be methodically researched (Sarkis, 2020). Because of the unique character of the COVID-19 problem, significant policy challenges were required to handle the S.C.D.s, which had to be distinct from previous experiences with similar dangers. Demand and supply have fallen sharply due to the protracted shutdown of nearly all economic operations, which necessitated significant government assistance. In the current scenario, the COVID-19 pandemic could be the first global S.C.D., necessitating establishing global solid supply chains (G.S.C.s) and mitigating associated risks.

(Mamani, p. 2021) have studied disease outbreaks and company operations. On a global scale, the COVID-19 epidemic confirmed that supply linkages worked as the veins of economic activity. The COVID-19 pandemic has jeopardized the global production network (G.P.N.), resulting in a rise in S.C.D.s. Manufacturing, distribution, and transportation disruptions have had far-reaching economic consequences, including restricted mobility, S.C.D.s, and the regular operation of enterprises.

Transport and logistics system disruptions have substantially influenced supply chain operations (Baghalian, 2013). COVID-19-related restrictions have hampered economic operations and disrupted transportation networks in the maritime, rail, air, and trucking businesses. Finally, trade barriers, demand restraints, and transportation delays have wreaked havoc on supply networks and, as a result, freight volumes. The COVID-19 pandemic produced a slew of substantial delays in transportation and logistics services, including airline cancellations that constrained air-freight capacity, affected global circulation. Due to labor constraints and the temporary shutdown of ports, customs clearance was slowed. As a result, the production of goods and consignments in transit was delayed, as they were diverted or discharged before reaching their final endpoints.

Express shipping services (e.g., FedEx, DHL, and U.P.S.) have become increasingly important in supply chains, and logistics as the economics of e­commerce and online shopping have grown in recent years. E-commerce service providers have seen substantial development in their operations despite the COVID-19 outbreak. Between 2019 and 2023, India's e-commerce market is expected to develop at a compound yearly growth rate of 19.6%, reaching a value of US$98.4 billion. Due to a change in consumers' preferences from in­store to online shopping, e-commerce payments were predicted to rise by 25.9% in 2020. As a result, transportation and logistics services play a critical role in preventing unpredicted pandemics like COVID-19. As a result, S.C.D.s have been particularly sensitive to transportation and logistics interruptions. In the framework of COVID-19, insufficient thought has been given to analyzing the pandemic's influence on transportation and logistical disruptions and the resulting implications on S.C.D.s, particularly in India. (Rashi Taggar, 2021)As a result, we made a small attempt to bridge the knowledge gap in this area by investigating the influence of the pandemic on Indian enterprises' transportation and logistics systems and proposing an S.C.R. mitigation model to address transportation and logistics disruptions and subsequent S.C.D.s

3. Supply chain risk and Covid-19

3.1 How covid-19 affecting the global supply chain

Global supply chains have faced considerable hurdles as a result of the COVID- 19 epidemic. Multiple countrywide lockdowns continue to stifle, if not entirely halt, the movement of raw materials and completed goods, causing manufacturers to suffer. The pandemic, on the other hand, hasn't necessarily posed any new obstacles to supply chains. In some areas, it brought to light previously unseen vulnerabilities, and of course, many organizations have suffered staff shortages and losses due to COVID-19. But overall, it has accelerated and magnified problems that already existed in the supply chain. Many enterprises worldwide rely heavily on production and supplies from China, Southeast Asia, and other low-cost jurisdictions (Hedwall, 2020). Broad worldwide trends in recent years have compelled major organizations to reconsider their supply chains and their stability and reliability in preparation for an uncertain future. A forecast of COVID- 19 impact on trade and growth is shown in figure5below.

According to trade data, China lost market share in global exports faster in 2019, as businesses relocated to other nations. Low-cost manufacturing has shifted primarily to Mexico and Vietnam. By 2019, the two countries had boosted their combined market share in the consumer goods and technology, media, and telecoms (TMT) sectors to 12% and 9%, respectively, mainly at the expense of China. (Hedwall, 2020) Clothing and smartphone exports from Vietnam and vehicle components and computer exports from Mexico all increased. There is no easy way to replace China. 60 percent of world consumer goods exports and 41% of global TMT exports come from the country. However, we anticipate that businesses will increasingly consider China +1 strategy.

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Figure 5. Forecast of COVID-19 Impact on Trade and Growth (McKenzie, 2020)

Companies often reduce their technology spending to a trickle in uncertain economic circumstances. During the COVID-19 epidemic, however, 92 percent of companies continued to invest in technology. This investment demonstrates the value of a digital supply chain in assisting businesses in navigating disruptive forces and responding more quickly to fluctuating supply and demand. However, some industries were particularly heavily hit. According to (Harapko, 2021) the pandemic has harmed all automotive and nearly all 97 percent industrial products companies. A bar diagram showing the expected loss of different industries in America is shown in figure 6.

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Figure 6. The expected loss of different industries due to the Covid-19 pandemic (Harapko, 2021)

3.2 Risk and uncertainty in global supply chains during Corona pandemic

In discussing the distinction between risk, randomness with knowable probabilities and uncertainty, randomness with unknowable probabilities, once remarked that "if you don't know for sure what is going to happen, but you know the odds, that is a risk. If you don't even know the odds, that is uncertainty. Uncertainty must be taken in a sense radically distinct from the familiar notion of risk, from which it has never properly separated (Chopra, 2004). The important point is that "risk" can refer to a number that can be measured in some situations, while it can also refer to something entirely different, and depending on which of the two is present and active, the bearings of the phenomenon can differ dramatically.

From the beginning of 2000, there is a debate concerning the spate of risks and uncertainty fears. As a result, in today's turbulent global Covid economy, the certainty concerns and risks that come with it are more than ever before incorporated into an organization's must-do list, and "those stemming from supply chains are prominent in the competitiveness and viability of companies and organizations." From a supply chain management perspective, probability can be viewed as how often a disruptive event can lead to a loss. (Amelie Meyer, 2021) Regrettably, even though the risks have received a great deal of attention and continue to rise, Global supply chain managers are have not done enough and are unprepared to manage and mitigate those risks effectively. For example, a global survey of business executives reported that,

1) Approximately 67% of respondents said that the risks to their global supply chains have increased over the past five years
2) About two out of three executives who responded indicated that they are facing increasing risks to their ability to supply their customers with goods and services cost-effectively
3) A significant number of the executives do not spend enough time or resources onmanaging and mitigating risks
4) Approximately 25% of their companies do not perform formal risk assessments, and about 50% lack company-wide standards to help manage and mitigate risks.
5) Few executives expressed confidence in their firm's ability to successfully manage various risks and make limited use of some well-known tools that could help.

3.2.1 Sources of risks and uncertainty in global supply chain

To mitigate risks in the supply chain, one must first identify the underlying sources of risks. By risk mitigation, those strategic actions organizations pursue to thwart the uncertainties identified from various sources. Therefore, because unexpected events and uncertainty cause risks, it is necessary to identify and categorize the sources of risks in global supply chain logistics. GSC risks can emanate from various forms. Supply chain risk sources emanate from environmental, organizational, or supply chain logistics-related factors that cannot predict accurately and impact the supply chain outcome variables. Also, due to the inherent complexities of the physical and economic systems, the unfolding of most processes shows attributes that cannot be forecast with absolute accuracy. The sources can be categorized into three groups (Shefali Kapadia, 2021). A graph showing the quarterly industry Warehouse vacancies dip in German companies is demonstrated in figure 7, and a bar diagram showing the quarterly industry warehouse rent raise is in figure 8.

1. The environmental (external) risk sources to the supply chain

Events in the supply chain might cause external hazards either upstream or downstream. External risks can be divided into five categories.

Demand risks — caused by random or misunderstood customer or end­customer demand

Supply risks — caused by any disruptions to the flow of product, whether raw material or parts, within your source chain

Environmental risks — from external the supply chain; typically related to economic, social, administrative, and climate factors, counting the threat of terrorism

Business risks — triggered by factors such as a supplier's monetary or management stability, or purchase and sale of supplier companies

Physical plant risks — caused by the circumstance of a supplier's physical facility and controlling compliance

The organizational (internal) risk sources to the supply chain

Internal risks provide better chances for mitigation because they are within your business's control. There are 5 key types of internal risks: (Shefali Kapadia, 2021)

Manufacturing risks — began by disruptions of internal operations or processes

Business risks — Changes in key employees, management, reporting structures, or business processes, such as how buyers communicate with suppliers and consumers, can all impact. (disruptions, 2020)

Planning and control risks — caused by improper management due to insufficient valuation and planning

Mitigation and contingency risks — caused by a failure to plan for contingencies (or alternate solutions) if something goes wrong.

Cultural risks — created by a company's culture of hiding or delaying undesirable information When confronted with unforeseen circumstances, such businesses are typically slower to react.

Figure 7. Quarterly industry warehouse vacancies dip (Shefali Kapadia, 2021)

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Figure 8. Quarterly industry warehouse rent raise (Shefali Kapadia, 2021)

3. The network-related risk sources within the supply chain lack ownership, chaos, and inertia. Because of ambiguous lines of responsibility, lack of ownership risk sources in supply chains can result in little or no control. Chaos risk sources in supply chains are caused by over-reactions, unnecessary interferences, false alarms, lack of transparency, and other factors. Inertia risk sources are caused by administrations' inability to sense and respond to changing environmental and market conditions. The sources of uncertainty in the supply chain include customs regulations, price changes, information delays, competitor action, political environment, stochastic cost, available capacity, supplier quality, manufacturing yield, and internal organization.

3.2.2 Different supply chain risk

Financial problems, cash flow, and budget cut

All of our financial plans and forecasts from the beginning of 2020 are now completely out of date due to a combination of government regulations, quarantine, the closure of a large number of companies, the suspension or reduction of many services for economic or human resource reasons, budget cuts at most companies, and uncertainty about the future. (Pop, 2020) As a result, many organizations will be forced to deal with cash flow concerns, crisis management, and significant financial reductions rather than focusing on expected development and expansion into new markets.

Supply chain disruption

According to a March poll by the Institute for Supply Chain Management, about 75% of businesses have experienced supply chain interruptions due to the Covid- 19 epidemic and the imposed restrictions. Manufacturing, retail, and a wide range of other businesses are now concerned about the supply of goods from China, which is frequently their primary or sole source (Amelie Meyer, 2021).

People, work productivity, and resource management Rapid and unexpected changes, such as decreased demand for most goods and services, quarantine measures, increased remote work from home, as well as new business opportunities that arise from each crisis, have forced businesses to address human resource issues more than ever before and to plan their work capacity flexibly (Amelie Meyer, 2021). As a result, concerns like controlling and managing remote work from a home office using specialist project software like Easy Project, monitoring employee efficiency, and working hours reductions, wage reductions, and redundancies become relevant (Maria Camila Moreno, 2020).

Cybersecurity

Companies relocated millions of employees to a home office following the advent of the coronavirus pandemic and the imposition of quarantine. Many people are working remotely for the first time in their lives, and many of them are doing so on unsecured networks and devices that are easy targets for hackers. As a result, we've seen an increase in the number of cyber-attacks in recent months (Pop, 2020).

Legal issues

Many smaller entrepreneurs and medium and big businesses will most likely be unable to meet their contractual and other legal duties due to the events outlined above. This will manifest in increasing uncertainty among business partners, cost-cutting measures, and even an increase in the number of lawsuits and damages claims.

Unpreparedness for the "new normal" world

Even though much of the current shift is negative, the situation can be viewed as a system transformation. Many people and businesses are still hoping to return to the "normal" state where they worked and earned profit before the crisis. However, I believe that you never join the same river twice, and the new "normal" world that emerges from this crisis may be significantly different from the old one in many industries for the foreseeable future. Many businesses will close or weaken as a result of this (Pop, 2020). On the other hand, it will create new opportunities that will eventually lead to capital redistribution on a local and global scale. A political shift could accelerate many changes resulting from a significant shift in society's mood due to the economic crisis and uncertainty. Many new trends may already be seen today, such as governments and organizations accelerating their digital transformations, shifting consumer buying behavior, even quicker e-commerce growth, and the advent of telemedicine.

3.2.3 Impact of covid-19 on the global Pharma supply chain

The global pharmaceutical supply chain is in jeopardy as the COVID-19 pandemic persists across the world. Widespread city lockdowns in China and continuing air-freight disruptions have impacted the pharmaceutical industry, particularly countries depending on raw materials from China. In the pharmaceutical industry, these raw ingredients are known as Active Pharmaceutical Ingredients (APIs). The US Food and Drug Administration (FDA) confirmed the first occurrence of drug unavailability owing to an API producer on February 27, 2020 (Everstream, 2021). The COVID-19 outbreak could serve as a wake-up call for the pharmaceutical sector and governments. It reveals long­standing vulnerabilities in pharmaceutical companies that rely on a single market for crucial ingredients and manufacturing processes due to workforce availability and cost advantages. The Merchant demand for APIs across the world is shown in figure 9 (Pharmalex, Resilience of Pharma Supply Chains and the Impact of Covid-19 Pandemic, 2021)

Other significant API manufacturers are Israel, Hungary, Italy, Czech Republic, Austria, Slovenia, Mexico, Puerto Rico, Monaco, the U.S, the U.K, China, and India. Other markets will be urged to expand their input to compensate for the shortages (resource, 2021). In Western Europe, demand for active pharmaceutical ingredients is centered primarily on the United Kingdom and Germany, owing to the higher proportion of generic medicine sales in these countries. (EFCG, 2021)

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Figure 9 Merchant demand for APIs (EFCG, 2021)

Drug shortages are not unusual, and they don't just happen during worldwide pandemics. The FDA had previously placed 145 pharmaceutical goods on its medicinal shortage list before COVID-19. The predicted catastrophic effect of Covid-19 did not occur. This is because of some reasons:

1. The pharmaceutical business had an adequate inventory buffer (average inventory is about 180 days for the entire industry)
2. Because drug manufacture has such extensive lead periods, the impact of a 1-2 week manufacturing halt in China would take a long time to filter through the supply chain (Pharmalex, Resilience of Pharma Supply Chains and the Impact of Covid-19 Pandemic, 2021).
3. API or final product supply problems in China did not last very long. The after­effects would have been more severe if this had not happened.
4. Regulatory hurdles for medications mainly were eliminated, where necessary, by regulators' introduction of flexibility to expedite regulatory processes.

The world's reliance on China's API

During the COVID-19 epidemic, raw materials were scarce due to manufacturing halts and labor constraints, exposing the Pharma industry's reliance on China. The country contributes significantly to worldwide API production and intermediate manufacturing. According to the World Health Organization, China accounts for 20% of global API output, while many healthcare organizations believe the proportion is double. According to the FDA, the number of registered facilities manufacturing APIs for U.S. pharmaceutical companies in China has doubled between 2010 and 2019. This is owing to labor availability and cost benefits.

China's API export rate has allegedly climbed by 14% annually in recent years, as has its market share in more than 70 countries and regions across North America, Europe, Latin America, and Asia. Shanghai is home to many large worldwide pharmaceutical enterprises, and close south of Shanghai is where most pharmaceutical facilities export to the United States and the European Union.

Why is India's API export curb important?

In March 2020, the Indian Ministry of Commerce and Industry imposed export restrictions on 26 APIs. India exports over 26% of European generic medication formulations while importing 24% of generic medicine imports to the United States in 2018.

The FDA and public health officials are currently working to determine how India's new export policy would affect medicine supplies. Generic medications like paracetamol, clindamycin, tinidazole, acetaminophen, and antibiotics are usually made using restricted APIs. Despite being the world's top pharmaceutical provider to several countries, India's pharmaceutical industry relies heavily on China for generic medication raw materials. Pharmaceutical companies import roughly 70% of Chinese APIs (EFCG, 2021). The Percentage of API manufacturing facilities for all drugs by country or region is shown in figure 10.

Pharma businesses have realized how reliant they are on intricate supply systems. As a result, the pandemic has finally persuaded all stakeholders to improve supply chain resilience in the future. Lower costs have been essential in shifting many manufacturing capabilities to China and India in the previous ten years (EFCG, 2021). As a result, we've witnessed a considerable increase in production quantities in these nations, where, according to FDA statistics published in 2019, about 40% of registered sites for active pharmaceutical ingredients (APIs) were based in India or China.

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Figure 10. Manufacturing site of API's for U.S market by country or region
(Pharmalex, Resilience of Pharma Supply Chains and the Impact of Covid-19
Pandemic, 2021)

3.3 Labour shortage and production slowdown

Resuming operations does not always imply total production. Some companies have reported 80% capacity utilization rates. Raw material supply continues to be limited since suppliers have not yet wholly ramped up operations. Furthermore, manufacturers are hampered by a staffing deficit, as several employees are still stranded in their hometowns owing to travel (OCED, OCED Library , 2021). The government put limitations on the mobility of at least half a billion people around the country in over 100 locations to curb the spread of COVID-19 infections. The return of workers to factories has been significantly delayed. The job impact has been ten times greater than the global financial crisis (Pharmalex, Resilience of Pharma Supply Chains and the Impact of Covid-19 Pandemic, 2021). A comparison between labor crises during global financial and corona crises is shownin figure 11 below.

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Figure 11. Labor crises during Global financial and corona crisis, a comparison (OCED, better policies for better life, 2020)

3.4 The unemployment rate in Germany

Saxony is a German federal state in the east. It is bordered to the north by Brandenburg, to the north-west by Saxony-Anhalt, to the west by Thuringia, and Bavaria's southwest-west. The state is also bordered on the south by the Czech Republic and the east by Poland. Dresden is the state capital. Saxony is one of the largest states in Germany, with a population of 4.1 million people and an area of over 18 400 km2 (commission, 2021). Saxony has a long history as a business location with a high-performing sector. Today, the Free State is one of the most vibrant Länder in eastern Germany, with the highest job density excluding Berlin.

Saxony's economy has expanded by 25.3 percent since 2000 (March 2021), the second-highest growth rateamong the German non-city states.

As of March 2021, the unemployment rate in Saxony was 6.5 percent, compared to a national average of 6.3 percent, up 1.0 percentage points from the previous year. Male unemployment climbed by 11 300 or 16.0 percent in February 2021 compared to the same month the previous year, while female unemployment increased by 9 500 or 19.2 percent. In the reporting month, 41.8 percent of all unemployed people were women (Dolgui, 2020). The number of individuals employed in Saxony decreased compared to the previous year due to the coronavirus outbreak. However, employment entitled to social security contributions has increased again from November 2020. The COVID-19 pandemic is having an impact on a variety of sectors. The transportation and warehousing sector saw the most significant gain (+2.4 percent). The most significant reduction was in the hotel industry (- 5.9 percent ). The unemployment rate in Germany is shown in figure 12below.

Furthermore, fewer jobs have been registered since the COVID-19 pandemic. However, when seasonal and calendar influences were taken into account, the number of job openings increased in February 2021 (commission, 2021)

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Figure 12. The unemployment rate in Germany (commission, 2021)

3.5 Air-freight cargo disruption

The availability of air cargo capacity is critical for transferring raw materials, pharmaceuticals, and other chemicals. Special treatment of such commodities is required due to the extreme sensitivity of the cargo, which usually necessitates temperature-controlled storage. On the other hand, the commercial airline industry has been impacted by numerous flight cancellations.

The use of charter flights and cargo freighters has had little impact on medical cargo air-freight. However, because passenger airline cargo holds a significant portion of overall air freight, logistic providers and pharmaceutical businesses must contend with capacity limits and the additional financial burden (EMSA, 2021). More crucially, any financial strains faced by airlines now, which may result in future insolvencies, significantly impact the whole air freight sector.

3.6 Delivery delays during the covid-19 pandemic

Before the COVID-19 pandemic, all businesses relied on interconnected and lean supply chains to close the gaps by increasing supply chain efficiency. However, the pandemic has exposed most organizations to significant supply chain disruptions (SCDs) due to previously unknown supply chain weaknesses.

In a crisis, manufacturing interruptions are defined as disruptions in internal processes caused by a delivery interruption in raw materials or vehicle components. Supply disruptions included incoming supply from suppliers, as well as shipment and supply market failures (Wieland, 2021). The hazards associated with unstable surroundings, demand complexity, dynamic consumer needs, and demand uncertainty, which influenced the logistics and transportation system, were called demand disruption. Firms must pursue short- and long-term risk management techniques to prevent disruptive risks like the COVID-19 problem.

3.7 Online questioner

An online poll is created with the help of the Typeform website, which is used to create different questions. The questioner is created to quantify the abovementioned problems and affect most supply chain sectors in different parts of the world. Most of the questions were yes or no and multiple-choice questions. The questions were,

1. Are your companies supply chains are interrupted during the covid-19 pandemic?
2. Did your company experience a tragic sales decrease during the covid-19 pandemic?
3. Did you expect significant demand for certain products?
4. Did you experience a lack of business during the pandemic time?
5. Is your company experienced order cancellation?
6. Does your company deliver products on promised time?
7. Is your companies central supply chain risk volatile demand?
8. Is your company's primary supply chain risk lack of employees?
9. Does your company establish any strategy for normalizing the supply chain risk?
10. How important do you think the transparency of a company to its customers?
11. Have you ever thought of establishing a new market across the border?
12. How important do you think digitalization to a company is?
13. Does your company approach an alternative supplier?

These questions created with the help of Typeform software were sent to different logistics experts of different companies and requested to fill. Around 45% of logistics experts were ready to fill the form, 30% completely ignored my request, and the remaining was not ready to fill due to the company policy.

4.1 Online questioner

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Figure 13. Figure showing the response of Logistics experts of different organizations.

According to the online poll, 90% of the experts responded that their companies' supply chains were interrupted during the covid-19 pandemic. 91% of the companies experience a tragic sales decrease during the covid-19 pandemic. 25% of the respondents expected significant demand for certain products, primarily grocery, and medical supply chains, and 56% said they experienced a lack of business during the Covid time. Another 47% of the companies experienced order cancellation, and 67% of respondents were unable to deliver products on promised time, mainly local logistics because of the local restrictions in different cities. 60% of companies agreed that their central supply chain risk was volatile demand, 10% of respondents said that their company's primary supply chain risk was lack of employees. 55% of the companies established strategies for normalizing the supply chain risk. 47% of the respondents think it is imperative, transparency of a company to its customers. Even though establishing a new market during the Covid time is challenging, 54% thought of establishing a new market across the border. 87% of the companies (regardless of local and international) think digitalization to a company is essential in the future. Most of the companies, almost 77%, approached alternative suppliers during the Covid-19 Pandemic time.

Germany

For German corporations, the risk of concentration is a more significant worry. Concentration risk is ranked as one of the top three hazards to production sites by 28% of German companies, much higher than the French, US, UK, and Italian companies.

In the survey, 76 percent of German companies say less than half of their suppliers are situated outside the nation, compared to 65 percent for other countries. According to a survey, only 6-10% of German companies consider reshoring in the medium to long term. It's worth noting that Germany is just as appealing to British and Italian businesses as German businesses. Austria receives more significant support than the United States, the United Kingdom, France, and Italy. This is most likely because German businesses already have a third of their non-German suppliers in Austria.

Innovation is more important for German companies when selecting suppliers. In their top three criteria for picking supplier locations, 30% of German businesses cited "the country's reputation for being inventive and having an atmosphere that fosters innovation." In comparison, all other countries have a 20 percent stake. This is steady with Germany's long-standing competitiveness policy, which prioritizes quality over cost.

France

The danger of supplier insolvency is a bigger problem, and companies are worried about it. When questioned about the top three risks to their supply chains, 30% of French companies named supplier insolvency as one of their top three concerns, compared to an average of 20% in other nations. Corporations in France have always had lower profit margins and larger debt ratios than companies in other central Eurozone countries, and the Covid-19 issue has exacerbated the problem, profit margins of French companies took the most significant hit, declining from a gross operating surplus of 33.3% Q4 2019 to 27.8% in Q2 2020.

In the same period, NFC debt to GDP ratios increased to 44.1 percent in Germany, 68.2 percent in Italy, and 69.1 percent in Spain. Such distinctions may explain why French businesses are more concerned about supplier insolvency. Following the United States, France has the highest likelihood of considering reshoring. Between 13 and 18 percent of French enterprises are considering reshoring in the medium to long term. When asked why they are considering shifting manufacturing, 28 percent say they want to create jobs at home, the most significant percentage of any country (17 percent in the U.S., 15 percent in the U.K., 10 percent in Germany, and 16 percent in Italy). Corporations in France and Italy also worry more about government incentives for specific industries than companies in the US, the UK, and Germany.

When asked what policy measure would help boost the domestic resilience of supply chains, French companies that aren't considering moving their production disagree on a single solution. Interestingly, tax incentives, R&D investment, and greater labor market flexibility appear to be the top three choices for 41 percent of respondents. As it allocates EU funds, the French stimulus package should help resolve some of these issues. The French stimulus plan should help address some of these concerns as it allocates EUR 35 billion to the development of innovative industries and enhances international competitiveness. The reduction in production taxes of EUR10 billion in 2021 and 2022 is also an essential step towards improving the attractiveness of France. In addition, the stimulus package includes EUR150 million for municipal-led industrial initiatives, EUR40 million to increase the resilience of value chains in strategic sectors, and EUR40 million to promote innovative industries and upgrade their value chains. However, due to France's high unit labor costs, these figures should not result in a significant shift in production and widespread reshoring.

4.2 Risk Management strategies

Companies must mix short- and long-term risk mitigation methods with flexible and inventive use of existing resources in a post-COVID-19 economic recovery scenario to smooth and secure the supply chain across the industry. (Tapas Sudan, 2021)

Risk management strategies for the short term

Short-term risk management techniques should comprise the crisis response team and contingency planning, backup route, third-party logistics (3PLs), transport cost structure, transport event managing, outsourcing transport, transportation audit, supplier collaboration, and the flexible contract. The other most crucial short-term risk management strategy is Government control over essential goods.

Government control

Government should keep an up-to-date database of important contacts from suppliers, distributors, and wholesalers to ensure rapid response during an emergency. Because raw materials and APIs sourced in one jurisdiction are likely to be produced and packaged in another, visibility of the places in use is critical. This allows the government to quickly identify the affected areas and evaluate alternative providers to avoid production disruptions. (EFCG, 2021) and also government should conduct the transfer from the supplier to the customer directly without any halt. A special planning commission should be arranged only for disaster logistics. The neighboring countries can act as a single unit.

Team in charge of crisis response

A crisis response team should assist companies in identifying planning gaps in the transportation system and the necessary internal and external resources for a better response. Understanding the negative impact of transportation interruptions in supply chains and swiftly responding to disruption risks can be aided by analyzing reaction capabilities and vulnerability assessments.

Contingency planning

The financial impact of a shortage of vehicle components and goods due to disruptions in internal and external transportation systems should be prioritized in contingency planning. The backup strategy involving different suppliers, also known as contingent rerouting, has gotten much attention from researchers.

Backup Route

Diversification plans in transportation and logistics necessitated significant investments ahead of any anticipated disruptions, such as the COVID-19. When a disruption occurs, the companies must absorb the direct and indirect transportation expenses associated with the backup supply route strategy. The use of resources and the occurrence of an interruption should be integrated into the backup supply route strategy. Similarly, if a company's usual way of transportation is affected, it can use an emergency mode to lessen the danger of a lead time interruption. Researchers also considered transportation delays and suggested how "backup transportation" could help.

Third-Party Logistics

Unexpected circumstances, such as the COVID-19 epidemic, require businesses to adapt. 3PLs can assist supply networks in the event of a disruption. Previously, 3PLs supplied transportation and warehousing and new and inventive techniques to lower the contact distance between suppliers, manufacturers, and customers. Regardless of the mode or volume of freight, 3PLs can assess and customize solutions to a company's needs by gathering transportation and logistics data to estimate exact demands, influence supply chain decisions, and, ultimately, improve process efficiency and customer experience. (Camarena, 2020) Working with a third-party logistics provider can assist companies in mitigating the short­term effects of shipping disruptions.

Transport Cost Structure

Companies should concentrate on everyday transportation management and cost structure to withstand the pandemic in the short term. The cost of transportation is divided into two categories: unit costs and production expenses. By concentrating on unit costs or carrier rates, the transportation network becomes unstable. The productivity costs are the opportunity cost during a disruption (Craighead, 2007). This can assist companies in recognizing the importance of the transportation cost structure to reduce transportation disruptions and improve transportation responsiveness and visibility in supply chains. Negotiating carrier rates that are fair, competitive, and equitable to all parties should be the ultimate goal. However, occasional transportation cannot achieve long-term cost savings.

Transport Management and Outsourcing

It's essential to focus on daily event management and hour-by-hour waste detection and minimization. A daily transportation plan and its execution following the current situation should be accomplished. Any waste detected should be documented and tracked using problem-solving strategies such as daily route designs, real-time tracking, and creating real-time metrics. If necessary, transportation outsourcing should also be stated.

Transportation Audit

A complete transportation audit should be implemented across all modes and geographies. A transportation audit can aid carrier and regulatory compliance by finding cost-cutting options upstream in sourcing, planning, and execution. A transportation audit can be conducted to examine present carriers, shipping demands, and transportation practices.

Supplier Collaboration and Flexible Contract

With diverse domestic suppliers, strong collaboration and cooperation are required. Firms that operate with suppliers in different parts of the country should find and cultivate backup suppliers. When transportation is disrupted, the firms' existing contacts may give them an advantage over their competitors, who were also hurt by the disruption and experienced lost productivity (Maria Camila Moreno, 2020). It can result in more flexible transportation contracts, allowing for transit across the land, air, and sea delivery systems in the event of disruption like the COVID-19.

Long-Term Risk Management Strategies

Supply chain partnership, intelligent transportation system (ITS), Industry 4.0, vendor management system, supply chain freight visibility, carrier affiliation management, and digital supply network are all long-term risk management strategies that can help businesses revive and resiliency against disruption risks (DSN).

Supply Chain Collaboration

The collaboration in logistics processes referred to the continuity of flow, transport, and warehousing activities in the supply chains. It provided adequate conditions to facilitate the B2B and B2C relations to reduce transport cost reduction in supply chains. It can assist businesses in constructing transportation resilience in their supply chains. To stay competitive, strong collaboration was required among various stakeholders, including enterprises, suppliers, and customers, to exchange resources, information, and technology to build synergy and recover from disruption.

Bridging, Invest in collaborative structures or initiatives or intensifying information exchange (Chopra, 2004)

Flexibility, Build organizational and inter-organizational capabilities to sense threats to supply continuity and respond to them quickly (Woojung Chang, 2014)

Control, Increase the ability to control processes, systems, and decisions through integration (Zsidisin G. a., 2014)

Intelligent Transportation System

Firms can use ITS and other administrative tools for operation management and decision-making to develop their logistics and transportation systems with a robust application of information technology for effective and efficient transport management. The term "ITS" referred to the interconnection of various information systems to capture, communicate, compute, and aid decision-making and allow effective management of the flow of vehicles and transportation modes (Percentage of supply chain disruptions due to coronavirus, 2021).

ITS also supplied collaboration tools and a dependable transportation management platform. Some of the most extensively utilized ITS applications include electronic toll collection (ETC), highway data collection (HDC), vehicle data collection (VDC), transit signal priority (TSP), traffic management systems (TMS), and emergency vehicle pre-emption (EVP). These solutions can help businesses construct more resilient transportation systems and increase efficiency during transportation disruptions. These technologies provided effective transportation management, resulting in cost-effective and safe routes. They enabled users to give relevant information, such as reducing traffic congestion, managing freight fleets and vehicles, improving infrastructure, and managing communication between these elements (Dolgui, 2020). The most current ITS generation, generation 4.0, uses multimodal systems including personal mobile devices, vehicles, infrastructure, and information networks for system operations and personal, contextual mobility solutions.

Automation

More types of employment are mechanized as the cost of automation decreases and people realize that robots can work securely alongside humans. Automation has become even more appealing because social separation in factories has become a need due to the pandemic. As a result of these advances, returning off-shored production to higher-cost countries is becoming more feasible. Robotic palletizers, which may drastically cut the number of human resources required to prepare products for transportation and automated optical inspection systems for quality control, will quickly pay for themselves.

Industry 4.0

To build logistics 4.0, companies should embrace and connect their logistics and transportation systems with Industry 4.0. Logistics 4.0 refers to using logistics with cyber-physical system innovations and applications (Shih, 2020). The following technology applications must be used and relied on by an efficient and robust logistics 4.0: resource planning, warehouse management systems, transportation management systems (TMS), intelligent transportation systems, and information security. These solutions can help improve transportation agility and flexibility while also allowing for faster recovery from disruptions. Supply chains have become more resilient as a result of increased flexibility, agility, and redundancy. With the widespread usage of IoTs and the inevitable transition to Industry 4.0, a TMS is an integral component of the logistics 4.0 concept. Real­time and in-line data must be employed in Logistics 4.0. For a corporation to employ GPS technology to precisely find its cars while on the road, monitor freight movement, negotiate with carriers, combine shipments, and use the platform's advanced functions and interface with ITS, the TMS system has been critical. (Parast and Shekarian, 2019).

Vendor Management System

Wal-Mart and other retailers have embraced vendor-managed inventory (VMI) as a successful business model. Suppliers, manufacturers, distributors, and retailers can benefit from VMI's assistance in better understanding and collaborating. The VMI model used electronic data interchange (EDI) to communicate information (inventory level and demand data) throughout the chain's participants, which can aid in understanding the transportation disruption for upstream and downstream partners in crisis. It can also aid in the analysis of transportation-related demand and supply disturbances. The manufacturer can use EDI to manage distributor inventory and determine a distributor's automotive requirements (Chopra, 2004). The supplier can also use EDI to evaluate the manufacturer's raw material inventory level based on production planning and business decisions.

Supply Chain Freight Visibility

When a company faces a disruption risk, such as the COVID-19, supply chain partners need visibility into supply chain freight operations, referred to as supply chain freight visibility (McKenzie, 2020). During a crisis, transportation systems can concentrate on integrating cutting-edge supply chain visibility technologies into their operations to respond quickly to changes utilizing real-time data.

As a result, businesses should use real-time strategic data such as traffic patterns, weather, and road and port conditions to modify demand, divert supply, and optimize routes. Logistics firms that usefully integrated supply chains are more efficient than firms that do not. IoT sensor technology has shown to be a valuable asset in the tracking of shipments. With the help of connected IoT sensors on parcels, the warehouses could track goods, cars, and equipment via cloud services (Seuring, 2008). Simultaneously, container management enabled by the Internet of Things made it more accessible through real-time monitoring, improved fuel efficiency, introduced preventative maintenance, and made container operations proactive rather than reactive. With this in mind, collaborations between IoT and logistics firms should be critical for recovering and mitigating logistics interruption during a crisis.

Carrier Relationship Management

Shippers, providers, and carriers who banded together to build a team focused on balancing cost and performance can achieve better long-term results. Carrier relationship management is the term for this. When each team member knows and respects the aims of the others, it can help everyone see things from a different viewpoint and imagine and explore standard solutions.

When capacity is limited but predictable, carriers, for example, require lengthier lead times to meet agreed-upon service expectations. Shippers may demand even shorter-than-usual timetables due to rising client expectations for same-day pickup, faster delivery, and personalized service (Dolgui, 2020). These two sets of needs would be considered incompatible in a typical competitive context. Each player would be at chances with the other, shouting, accusing, and desperately holding to their positions. In today's more collaborative market, the shipper and carrier should work together to identify common goals, complementary needs, and viable options for long-term win-win solutions.

Digital Supply Network

Most businesses lack an end-to-end picture of their supply chain and the agility to deal with the unpredictability of today's market. The digitally linked information and transportation networks, DSN, gave the companies a limitless real-time visibility level. DSNs can help with various supply chain difficulties, including lack of visibility, slow reaction times, competing priorities, and insufficient risk management models. The DSNs must have four characteristics to be built: they must be fast, scalable, intelligent, and linked. By building powerful data analytics skills, companies can improve supply chain responsiveness to disruption concerns (Shih, 2020). By replacing traditional supply chains with DSNs, supply chains can benefit from the increased talent, physical, financial, and information resources, promoting collaboration and open communication with upstream and downstream suppliers. Such measures can help the firms mitigate the risks posed by the transportation disruption in the context of the COVID-19 crisis.

Additive manufacturing

This manufacturing approach, also known as 3D printing, can drastically reduce the number of steps required to create complicated metal forms and eliminate reliance on distant suppliers of machines and tools for processes like plastic injection molding. Rapid advancements in 3D printing have made it feasible to make an ever-increasing variety of goods in much bigger volumes at a lower cost. (Shih, 2020)

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Figure 14 Transportation disruptions and risk management for the revival and recovery of the firms from the COVID-19-like pandemic crisis in the future.

Additionally, the following recommendations for flexible resource use in post- COVID-19 supply chain recovery should be considered, shifting ocean cargo to air, converting empty passenger aircraft to passenger-freighters by adding belly cargo, freight consolidation, warehousing near point-of-origin or destination, and converting stores into distribution and fulfilment hubs, through careful timing of orders and deliveries, the use of efficient alternative airport, port and trucking routes, vehicle routing and scheduling solutions to reroute shipments, efficient staff-vehicle utilization (Tapas Sudan, 2021), and redeployment of assets in real­time, and the use of the trailer and product sensors to help monitor, ocean freight can be strategically used as floating storage and locate critical items moving through the supply chain, diversifying sourcing strategies, use of an interoperable set of e-freight systems to provide real time data, substituting cargo cycles for delivery vans, shared mobility pickup and drop-off zones, delivery and loading zones, multi-sourced essential commodities or strategic components to diversify their supply chains geographically, evaluate alternative inbound logistics options, collaborate with domestic suppliers, use of drones for delivery, and use of supplier specialization platforms to reduce supply delivery risk through supplier development training. Demand is anticipated to be unclear soon, putting pressure on the transportation and logistics industry to work efficiently by utilizing flexible and innovative resource allocation to deliver a high-performing logistics system (Tapas Sudan, 2021) (Chopra, 2004). So, it is essential to recognize planning gaps and the necessary internal and external resources for a better response through an autonomous plan.

Challenges and Opportunities in Operationalizing the Model

Most transport and logistics operations are mainly handled manually in most countries, which led to high costs and low-profit margins. SCM was made possible by robust and modern transportation and logistics infrastructure, which increased the speed and efficiency of the logistics system while lowering the impact of SCDs (Craighead, 2007). Due to talent and resource restrictions, most countries' diverse transportation and logistics sectors have experienced several hurdles in integrating ITS and Industry 4.0. Only 2% of the world's supply chain enterprises have successfully used advanced information technology tools like GPS and shipment tracking and tracing. Some foreign logistics businesses in India have used Industry 4.0 techniques such as IoT, AI, and machine learning for intelligent storage and logistics.

Some developing countries also gained expertise in implementing small-scale ITS projects in most cities through traffic supervisory management systems, automated traffic control, automated terminal info services, enhanced public transportation, rapid bus transport, and rapid bus transitways. Some technology­forward logistics businesses used RFID systems, vehicle tracing technologies, and warehouse control systems. On the other hand, those still lack a solid digital policy to overhaul the traditional transportation and logistics industry. Due to a deficiency of technical proficiency and poor knowledge among key stakeholders, including the government, significant gaps in adapting new communication canals in the transport and logistics sector occurred. As a result, most developing and developed countries' transportation and logistics sectors require significant technology advancements, including significant digital transportation infrastructure and talent development investments.

Many nations' experiences in the diffusion of ITS and Industry 4.0 in the transport sector should be replicated to adapt and promote advanced modern technologies in emergency management, advanced vehicle control systems, and congestion management to strengthen the transportation and logistics system for mitigating SCDs. In the development of resilient transport and logistics systems in India, modeling, technology development, and interconnectedness of engineering branches such as transportation, electronics, communication, and information technology should be focused on using sensors, detectors, communication devices, and the global navigation satellite system, to digitize supply chains, as well as current advanced technologies like ITS, ALS, and Industry 4.0. (Amelie Meyer, 2021) (Baghalian, 2013) The government, the corporate sector, and academic research institutes must cooperate to achieve this cooperatively and responsively. The COVID-19 epidemic has compelled India to address these issues and use sophisticated modern technologies such as ITS, ALS, and Industry 4.0, emphasizing short- and long-term risk management techniques to boost transportation and logistics. Applying these advanced modern technologies in the transport and logistics sector demonstrated the initial agreement on deploying the transportation risk management model. It presented a conceptual framework and research problems for developing country's implementation of modern transportation and logistics systems. As a result, reliable communication channels based on sophisticated digital technologies are essential components of a proposed mitigation mechanism for dealing with a future COVID-19 pandemic.

5. Discussion

According to research, American, European, and Japanese companies cite China's enormous and rising market to motivate to keep producing in the country. In June 2020, According to the European Chamber of Commerce's Business Confidence Survey, China was one of the top three investment locations for 65 percent of members. China's worldwide market share of emerging market exports has increased in practically every category. Multinational corporations from other countries use China as a manufacturing base for exporting to new marketplaces (Amelie Meyer, 2021).

What are the SC risks?

There are numerous kinds of business risks. Risks can come from both inside and outside your company. They can also have a direct or indirect impact on your company's capacity to operate. Risks can be hazard-based (e.g., chemical spills), uncertainty-based (e.g., natural disasters), or opportunities-based (e.g., cyber­attacks) (e.g., taking them up or ignoring them).

According to trade data, China lost market share in global exports at a faster rate in 2019. companies have been successful in obtaining tariff exemptions from the US department of commerce. For enterprises that are either unable to identify accessible alternatives to China or are capital-constrained in China, the potential of gaining exclusions may delay the transition in production. Companies will be increasingly adopting supply chain diversification strategies. Manufacturing capacity in Southeast Asia, including land, human resources, and logistics, will define the region's future expansion as a supply chain hub. Another option for quick-moving buyers in Latin America, Mexico, has been gaining market share in global exports, aided in part by the United States-Mexico-Canada Agreement (USMCA), which has opened the way for the removal of trade barriers such as tariffs.

How can the global supply chain realign or future of the global supply chain?

Digitalization will impact how companies facilitate and manage supplier relationships and logistics and shipping procedures across all industries.

Automation and the Internet of Things are now at the forefront of supply chain disruption-proofing. Companies in the healthcare and life sciences industries are entering into Power Purchase Agreements (PPAs) with clean energy sources. As teams are compelled to communicate remotely and share digital assets with manufacturers, COVID-19 has expedited the adoption of 3D design tools. Although 3D design technologies are not new, adoption rates are likely to skyrocket shortly.

Governments restore essential medical products, particularly personal protective equipment (PPE) such as masks, goggles, and gowns. The primary limitation to domestic production is raw materials, and advanced economies will move fast to address this (Dolgui, 2020). To boost domestic production, governments will deploy low-cost loans, financial subsidies, and long-term contracts—relocation of critical media production. Governments will also utilize various tax and investment incentives to support new supply chain activities that create jobs, such as sophisticated manufacturing.

How successful be the realignment of the global supply chain in the present scenario?

Due to variances in supply and demand patterns, COVID-19 has a distinct influence on different business sectors. The automobile industry, which poor growth rates had already hampered in 2019, is expected to be the hardest hit. In the worst-case scenario, gross value added (GVA) might fall by as much as 10.6% in 2020 compared to the base-case scenario without a COVID-19 impact, with car sales down more than 10% from anticipated levels and no ramp-up conceivable owing to supply chain issues (Baghalian, 2013). A significant drop in sales in H1 2020 due to component shortages and supply chain issues is followed by a ramp-up in Q4 2020, mitigating the full-year effect in the mild Delayed Cure scenario. Under the Fast Recovery scenario, a compensatory ramp-up follows a minor reduction in sales volumes in H1 2020 in H2 2020.

The current crisis provides an opportunity to re-engineer a system that has become reliant on antiquated methods. The key to developing a global trade and investment network that can weather future storms is to create smart and agile supply chains.

The logistics industry is susceptible to COVID-19 because it reacts quickly to any reduction in trade flows. In the worst-case Profound Recession scenario, demand will plummet, with a rebound in line with overall economic growth not occurring until H1 2021 (Fuest, 2021). More extended production downtimes are predicted in the moderate scenario, resulting in a continued fall in demand for logistics services. Other lockdowns in central locations will likewise pose a more significant threat to the sector. In the best-case scenario, quarantine procedures and the isolation of entire provinces have the most impact in China.

Finally, the pharmaceutical sector will expand its supply chains, but consistent demand should ensure further expansion. In the worst-case scenario, growth rates will be modest, reflecting the sluggish global economy since non-essential purchases will be postponed. Due to supply shocks, GDP will drop in the moderate scenario, but demand will remain stable. In the case of a rapid recovery, stockpiles will be used to bridge a short production gap, followed by a rapid ramp-up in production as early as Q2 2020 (Fuest, 2021). The impact on Europe and the United States will be negligible in this optimistic scenario.

6. Conclusion

COVID-19 has demonstrated the risks of complex global supply networks predicated on lean manufacturing concepts. This is especially true in the healthcare industry, where the race for protective equipment has exposed the inherent hazards of inventory and single-sourcing models driven solely by cost savings.

The impact of China's trade embargo and its dominance in key manufacturing sectors has emphasized contemporary supply chains even more. In line with a lack of flexibility in their supplier base, firms failed to pivot when Chinese facilities shuttered. One anticipated effect is that global companies will diversify their supply chains in the future rather than relying solely on China. For example, Vietnam, Mexico, and India are likely to profit from this trend (Lin, 2020).

Manufacturing capacity will also decentralize, with corporations wanting to bring output back home. Automation and small batch production, which had grown so inexpensive that several countries began shifting elements of their supply chain back home, fuelled this trend. Policymakers may be under growing pressure to assess whether particular things must be manufactured in the country or the region. Rapid and widespread digitization of the paperwork accompanying global trade will underlie the shift to a new supply chain paradigm.

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Frequently asked questions

What is this document about?

This document is a comprehensive language preview obtained from a publishing company. It includes a title, table of contents, objectives and key themes, chapter summaries, and key words related to supply chain risk and the impact of the COVID-19 pandemic.

What topics are covered in the table of contents?

The table of contents includes the following topics: Abstract, List of figures, List of abbreviations, Introduction, Literature review, Supply chain risk and Covid-19 (including how Covid-19 is affecting the global supply chain, risk and uncertainty, labor shortage, unemployment rate in Germany, air-freight cargo disruption, delivery delays, and online questionnaires), Results, Discussion, Conclusion, and Bibliography.

What are the objectives and research questions addressed in this document?

The document aims to identify global supply chain risks associated with the corona pandemic, explore how the global supply chain can realign, determine the strategies necessary for realignment, and assess the success of realignment in the present scenario.

What is the motivation behind this research?

The COVID-19 pandemic has significantly impacted global business operations, revealing vulnerabilities in supply chain management practices. The motivation is to formulate strategies that help realign global logistics and supply chains by identifying different risks and developing an integrated conceptual framework.

What survey was conducted and what were its key questions?

An online survey was conducted to understand the impact of the pandemic on various supply chain sectors. Questions included: Are your companies supply chains interrupted? Did your company experience a sales decrease? Did you expect significant demand for certain products? Did you experience a lack of business? Is your company experienced order cancellation? Does your company deliver products on promised time? Is your companies central supply chain risk volatile demand? Is your company's primary supply chain risk lack of employees? Does your company establish any strategy for normalizing the supply chain risk? How important do you think the transparency of a company to its customers? Have you ever thought of establishing a new market across the border? How important do you think digitalization to a company is? Does your company approach an alternative supplier?

What were some key findings from the online questioner?

Key findings included that 90% of respondents experienced supply chain interruptions, 91% experienced a tragic sales decrease, 25% expected significant demand for certain products, and 56% experienced a lack of business. 60% identified volatile demand as a central supply chain risk, and 87% considered digitalization essential for their company's future. Also, the impact of COVID on supply chain risk was different depending on the country. In Germany the risk of concetration of the supply chain was a big worry, in France supplier insolvency was a major concern.

What short-term risk management strategies are discussed?

Short-term risk management strategies include: a crisis response team, contingency planning, backup routes, third-party logistics (3PLs), managing transport cost structure, transport event managing and outsourcing, transportation audits, supplier collaboration, and flexible contracts. The other most crucial short-term risk management strategy is Government control over essential goods.

What long-term risk management strategies are discussed?

Long-term risk management strategies include: supply chain partnership and collaboration, intelligent transportation systems (ITS), Industry 4.0 integration, vendor management systems, supply chain freight visibility, carrier relationship management, and digital supply networks (DSN). Additive manufacturing is also mentioned.

What are some challenges and opportunities in operationalizing the model?

Challenges include: The complexity of applying robust and modern transportation and logistics infrastructure, implementing robust and modern IT infrastructure, increased automation through IIOT. Opportunities include: creating SCM enabled supply chain via SCM practices, integration, and better visibility.

What is the conclusion of the document?

The COVID-19 pandemic has highlighted the risks associated with complex global supply networks and lean manufacturing. It suggests a need for diversified supply chains, decentralized manufacturing, and rapid digitization of trade processes.

• College: Dresden International University (Dresden International University (DIU))
• Course: Master of Business Administration In Logistics Management
• Grade: 2
• Author: Arantha Jessy Joseph (Author)
• Publication Year: 2021
• Pages: 54
• Catalog Number: V1189845
• ISBN (PDF): 9783346632456
• ISBN (Book): 9783346632463
• Language: English
• Tags: logistics, supplychain, coronapandemic, realignment