| | AUGUST 20208Vantage Point By Ajay Kapur, Founder & Managing Director, Shubham Chemicals and Solvents LimitedI t is quite possible the Covid-19 pandemic that has enveloped the world could turn out to be a wakeup call for a lot of organizations regarding their supply chains. The pandemic has exposed the vul-nerabilities in the global supply chains and there is an immediate need to rethink and transform the existing models so that we don't face the same supply crisis that we faced after the outbreak of Covid-19. Organiza-tions ­ big and small ­ from different countries of the world have been too heavily dependent on China for raw materials and finished products, and this lack of diversification resulted in a lot of trouble after the lockdowns were imposed throughout the world.Since China is the major exporter of goods and unofficially the world's factory, any crisis that affects China directly affects the entire world. One of the most alarming statistics is that 200 out of the Fortune 500 glob-al companies have their presence in the Wuhan district in China, which happens to be a highly industrial area. Unfortunately, it is also the epi-center of this deadly pandemic. The companies that are reliant on Tier 1 and Tier 2 suppliers in China have been very adversely affected as the production has gone down and supply chains have been broken. Accord-ing to research data by Dunn and Bradstreet, globally, 51,000 companies have either one or more Tier 1 supplier from Wuhan, and an additional five million companies have Tier 2 suppliers there. And now, due to travel restrictions, lockdowns and social distancing measures, so many com-THE IMPACT OF SUPPLY CHAIN BREAKDOWN ON BUSINESSES AMID COVID-19 AND PROBABLE SOLUTIONSpanies have had the land swept from under their feet.The impact of supply chain breakdown has been twofold. Firstly, the business own-ers have to devise strategies by monitoring short-term and long term demand to com-pensate for the loss in production due to the broken supply chains. At the same time, however, the consumers have begun panic buying products to stock up for any unprec-edented future lockdowns, which is leading to the depletion of inventories.Even though the situation is quite dire and fates of thousands of organizations hang in the balance, there are some things that business owners can do to mitigate the disaster. For ease of understanding, let's di-vide our solutions into three categories:1. For companies that operate from or have a business relationship with Chi-na or other impacted countries.2. For companies that source goods from China and other impacted countries.3. For companies that have a market in China and other impacted countries for their goods.Ajay Kapur
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