Lessons from the COVID-19 Pandemic Impact on Supply Chains webinar

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Executive Summary

In March 2022, the MIT Center for Transportation and Logistics (CTL) convened participants from industry, non-profits, and academia, for a webinar hosted by the MIT Global SCALE Network, to discuss how the ongoing Covid-19 pandemic, in all its variants, has rattled global supply chains with shockwave disruptions up, down, and sideways along the chains in a phenomenon known as the Bullwhip Effect.

Is it time to upend the textbook prescriptions? In this MIT SCALE-wide panel, the directors of the five network centers worldwide discussed their views and experiences on the evolution of global supply chains, while addressing questions such as: Is it time to shore up and shorten supply chains? Are global supply chains decoupling? Is this the end of lean and the start of just-in-case?

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Takeaways From the Pandemic’s Impact on Supply Chains

The Covid-19 pandemic changed the way companies respond to global disruptions. Nowhere is this more evident than in the supply chain field which was – and still is – on the front lines of the effort to manage the pandemic’s fallout.

An MIT Global SCALE Network webinar gave the network’s five member centers an opportunity to explore early supply chain responses to the crises. Here are some key takeaways.

Culture shapes Covid responses

A propensity for risk-taking distinguishes Chinese firms, a characteristic that colored their responses to the Covid-19 pandemic. For example, they embraced automation and rail transportation in their efforts to manage the pandemic’s uncertainty. Latin American firms are well versed in managing uncertainty, which is part of the commercial landscape in the region, and the pandemic reinforced this capability.

Global commonalities

But there were more similarities between how companies reacted to the pandemic than differences, due to the impact of globalization. For instance, supply chain practitioners were already used to working in teams across time zones before the pandemic erupted. Many European multinationals have headquarters in Asia, and faced similar challenges across the region when Covid-19 debilitated supply chains.

Lean called into question

The pandemic raised questions about certain well-established supply chain practices. Just-in-time/lean manufacturing came under fire as a cause of product shortages. However, this was something of a knee-jerk reaction, and JIT/Lean is still alive and well and will continue to be a key part of the supply chain management toolbox.

Reshoring doubts

Reshoring is another established supply chain practice that came under scrutiny at the height of the pandemic. The disruptions that rippled through supply chains prompted many companies to revisit their global footprints. For example, Eastern European countries such as Romania and Serbia attracted interest from European companies as alternative locations for distribution centers.

New thinking emerged

The pandemic also gave rise to fresh approaches to managing supply chains. In Latin America collaboration became more important; many Chinese firms turned to automation to help them manage the crisis. Responsiveness gained favor over precise planning, and established practices such as optimizing freight container utilization were revisited.

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