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COVID-19 Impact on Supply Chain Business

Covid-19-Impact-on-Supply-Chain-Business
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The recent COVID-19 outbreak has created a huge dent in the global economy. It has shattered businesses of all kinds. But the COVID-19 impact on supply chain business has been the most devastating. This has happened because most countries are in lockdown mode and transportation is severely restricted. This article talks about the COVID-19 impact on supply chain business and how ERP for supply chain management can help in times of crisis.

COVID-19 impact on Supply Chain Business

  • Pharma supply chains have been crippled and have created drug shortages.
  • Acute shortage of reagents and lab supplies has caused a serious cut in the production of COVID-19 testing kits.
  • Many truck drivers are falling sick due to which consumer packaged goods such as beverages and food are not able to reach shopping complexes.
  • People are panic-buying in bulk which is creating a shortage of supply of essential items.
  • Social distancing, the only way to save oneself from being infected, has led to excessive cut off in the workforce and has altered the dynamics of demand and supply.
  • Many manufacturing units in China, which is also considered the manufacturing hub of the world, have either shut down or are maintaining a skeletal workforce to continue their operations. This has caused a severe decline in the availability of essential items worldwide.

How ERP for Supply Chain Management can help you?

The COVID-19 impact on supply chain business has been shocking. It has left supply chain experts dumbfounded. Most countries are facing problems to gather products essential for survival. The points below explain how ERP for supply chain management can help companies in times of crisis.

  • It stores a list of essential items required for production and prioritizes the buying of critical components.
  • It identifies suppliers from high-risk and low-risk areas using Bills of Material (BOM).
  • Stores critical information about tier 1 and tier 2 vendors and decides whom to bank upon in times of crisis.
  • Forecasts the ability of the vendor to supply materials, in case the vendor does not share any information.
  • Identifies the current stockpile and the left-over inventory in the value chain.
  • Keeps track of spare-parts inventory that can be used for production.
  • Has rigorous algorithms to check the quality of materials produced.
  • Suggests ways to remove bottlenecks and propose ways to accelerate the arrival of materials.
  • Uses advanced statistical forecasting tools to estimate the demand of the final consumer.

How to maintain a Healthy Supply Chain during the COVID-19 Crisis?

The COVID-19 crisis has massively disrupted supply chains across industries. This problem has become more acute ever since the country has been under lockdown mode. Most factories aren’t functioning and people are buying essential items such as food and toiletries incessantly. According to a survey by the Institute of Management, about 75% of companies are facing troubles managing their supply chains. This article will focus on how ERP platforms can help you maintain a healthy supply chain during the times of crisis, such as the Corona Virus pandemic.

1. Have multiple vendors

For companies, especially those whose profits are directly dependent on sound supply chain management should have multiple vendors. This is because having a large database of vendors gives you a wide variety of options to choose from. These can be market price, availability of materials, delivery time and many more. Also, it ensures that you have the required supply at times when your preferred vendor is unable to send it to you due to legal restrictions or other emergencies. An ERP for supply chain management will help you keep track of multiple vendors and ensure that your production process continues unhindered.

2. Digitize your supply chain

Manual methods of creating vendor databases, inventory management, and keeping a watch over shipments is a cumbersome process. This is where an ERP for supply chain management can help you in the following ways:

  • It creates a vendor-portal where vendors can sign in and participate in the buying process
  • It automatically segregates the best vendors according to the set parameters
  • It automatizes document collection and handling process
  • It keeps a watch over compliance-related issues

3. Encourage remote work

According to the guidelines published by the World Health Organization (WHO), social distancing is the only way of curbing the spread of the virus. An ERP for supply chain management can be the most useful tool to ensure that. It provides easy access to business-critical information via mobile phones and allows you to manage processes from the factory floor. Also, it integrates with communication portals and enables your geographically dispersed team to remain in contact with each other 24/7. This reduces the required on-site workforce, which in turn, lowers the risk of your employees falling in the grip of the deadly virus.


Also Read: Engage Your Premium Customers Remotely


The proverb ‘Extraordinary times call for extraordinary measures’ define the current Coronavirus crisis aptly. Companies need to take hard decisions and act on them vigorously. The COVID-19 impact on supply chain business seems to be deteriorating with every passing day. ERP for Supply chain management appears to be the only solution to prevent further mess. At Sage Software, we are home to world-class ERP for supply chain management that efficiently handles all your supply chain problems and helps you run your company like a pro.

Disclaimer: All the information, views and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views or objectives of Sage Software Solutions (P) Ltd. 

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