How Covid Created Worldwide Supply Chain Issues

One of the many issues created by Covid is the supply chain issue which is now affecting various industries. There is a worldwide shortage of products as a result.

We all know the issue of car supply in 2021. By the end of 2021, there are literally no cars to buy. I have seen this firsthand when my friend wanted to buy a car. During our visit to Toyota and Mazda, we were told there are no cars to buy. They just have a few demo cars which they need to keep to themselves for demo purposes.

Due to low demand for many products, staff shortage, restrictions and lockdowns, many industries either stopped or delayed their productions. Now when there is a demand for those products, those factories are finding it hard to reach pre-pandemic levels of production. Also, there is a massive shortage of raw materials.

For instance, car manufacturers do not have enough car chips from the suppliers. There is a shortage of car chips worldwide. Chips are needed for everything in a new car today. Just touch-screens need up to five chips to run, and multiple chips are needed for autonomous emergency braking, anti-lock brakes, stability control, adaptive cruise control, airbag deployment, self-parking systems, seat memory, etc.

This supply shortage never gets a chance to fully recover as new variants of Covid keeps hitting us from time to time.

So what are companies doing about these shortage issues?

According to a 2020 survey by Ernst & Young, enterprises in the US plan to shake up their supply chain strategies to become more resilient, collaborative, and networked with customers, suppliers, and other stakeholders. To do that, they will increase investment in supply chain technologies like AI and robotic process automation while retraining workers.

The COVID-19 pandemic was a global disruption across trade, finance, health and education systems, businesses and societies like few others in the past 100 years. It is no surprise then that only 2% of companies who responded to the survey said they were fully prepared for the pandemic. Serious disruptions affected 57%, with 72% reporting a negative effect (17% reported a significant negative effect, and 55% mostly negative).

Now the question many are asking is, will the supply chain crisis spoil your Christmas shopping experience?

The Guardian recently described the supply chain crisis as a “perfect storm which could blow the world economy off course”. Australian e-commerce trader Peter Cole put it even more bluntly when he told Wired: “The whole system is totally f****d.”

As far as basic necessities and medical supplies are covered, they are not an issue in Australia. But cars supply issues will take a few more months to recover. Currently, the new Covid variant OMICRON is creating issues all over again with lockdowns again starting to hit cities. If it continues like this, it may take much longer than expected to recover from COVID affected supply chain crisis.