CORONA CRISIS AND SUPPLY CHAIN DISASTER IN PAKISTAN

The World Health Organization declared the coronavirus outbreak as a pandemic that has now affected more than 800,000 people in the world. This pandemic has killed more than 40,000 people worldwide and the current death rate is 3000+ deaths per day, which is expected to rise as more cases are reported each day. Today the outbreak has spread to more than 180 countries affecting every continent. The number of new cases reported in China has decreased, but the rate of new cases reported in other countries such as Italy, USA and Iran are much higher and difficult to contain.

The first two confirmed cases of the coronavirus were reported in Pakistan in late February. Today, after a month the number of cases has increased to 1900+, with 26 deaths and 60+ recoveries. It has been 8 days since the lockdown in the country, all businesses producing non-essentials have been closed and only food, medical facilities and some banks are operational. This lockdown has resulted in a new kind of supply chain disruption that can be the cause of economic devastation for the developing countries like Pakistan.

It is not easy to predict the scale and severity of such an outbreak but businesses could be better prepared to deal with such emergencies. As in Pakistan it is not the first time that an emergency has occurred that has resulted in supply chain disruption nationwide. This country has faced wars, earthquakes and floods that killed tens of thousands of people and affected millions. The current challenge that the country is facing is more impactful than all the other events as the production and transportation are at a halt. At this point the businesses struggle to deal with the impacts of the outbreak as their supply chain becomes fragile.

Here are some reasons for the fragile supply chains. Firstly, in Pakistan there is a need for the companies to have alternate suppliers in such a stressful environment so that they can connect with the alternate suppliers and the production process can withstand the sudden shocks. Secondly, supply chains of some SMEs in Pakistan are managed manually which can make it very hard or nearly impossible to shift suppliers and manage its transportation process in such times of stress. Finally, finally one of the biggest challenges faced by businesses is the lack of supply chain transparency, as the businesses are unaware of what is happening beyond the first tier which makes the situation worst and impossible to manage proactively. Such disruptions in supply chains can lead to an increase in prices and a shortage of supplies in the market that we are currently observing in Pakistan.

How can we solve such disruptions and make supply chain anti-fragile? Supply chains must continue their operations in all types of situations and such disruptions provide strength in it. For the robust supply chain all the business must go digital and there must be a strong connectivity in them. The buyers and suppliers in and outside the country must be digitally connected which will provide strength to the overall supply chain of the country. If this becomes operational then all the parties will benefit from the data available on the digital platform as it will be accessible to everyone. The transparency across the supply chain will be improved and the disruptions caused by the overbuying or transportation process will be better monitored and controlled. It will be easy for the decision-makers to monitor the complete supply chain and manage all the disruptions. With the digitalization the collaboration between suppliers and buyers will be stronger and the time required to find and add new suppliers will be less in emergencies.

Most of the businesses in Pakistan follow reactive supply chain management and this is about time that we change it from reactive to proactive supply chain management. For proactive supply chain to be operational there is a lot of work that has to be done in planning and digitalization of all the resources and capacities of businesses in the country. This can be done once the COVID-19 outbreak will be under control. The history has proved that such disruptions occur time and time again, the biggest risk for a company in such times is its supply chain.

If we had a digitalized and organized structure in place at the time of this outbreak then the things could have been a little different for us. We had 2 crucial months to proactively plan for the outbreak in the country. Let’s hope that the government has learned a lesson from the current supply chain crisis and it takes some important steps for a better supply chain structure that operates in such disruption too.

Tayyab Javeid, MS(SCM)

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