“The trick is to establish robust supply networks”

“Will the coronavirus pandemic change worldwide flows of goods permanently? Decision-makers in companies and governmental organizations must now closely examine their value chains—which up to now have been very broadly spread—for potential risks and explore how to adapt them to the new conditions.

Such ebbs and flows are certainly nothing new in global supply chain management. Just over ten years ago, the global financial and economic crisis had similar repercussions. Essentially, it’s about deciding whether to make supply chains as robust as possible or as efficient as possible. Over the past few years, the watchword has been efficiency: logistics was primarily seen as a procurement cost factor that had to be optimized. With the impact of the coronavirus crisis, the emphasis will now shift more toward strategic management. This anchors logistics as an integrated discipline at the top management level. In the interests of a robust security of supply, those working in this discipline are establishing interchangeable alternatives.

Learning the right lessons from the crisis

As they do so, their focus is not on regionalization or globalization, but on proactive risk management: nationalizing or regionalizing supply chains entirely, for instance in the area of medical protective equipment, is just as suboptimal and risky as procuring all products from a single country. The trick is to establish robust supply networks that intelligently integrate local suppliers as well as those in China, the US, and Europe. If the result is supply chains that are more agile, flexible, and resilient, then we will have definitely learned the right lessons from the current crisis.”