When the world’s number one factory shut down, it plunged an entire global supply chain infrastructure into darkness. This is the painful experience international companies lived through and one that may have lasting consequences as leaders are forced to navigate long-term strategic decisions in months that could have otherwise taken years.
Beyond the tragic human consequences of COVID-19, this period has revealed the ‘fragility of modern supply chains’ according to the WTO1, and for Oxford Economics2 the explanation for this lies in ‘lack of diversification’, with supply chain strategy often driven by cost reduction and not risk management for global crisis.
Reinstated lockdowns are clouding the global economic outlook and decisions made by companies to counter supply chain risks, and the investment of time and people into this, could have a lasting impact on global trade. The question is how? Europe’s automotive, pharmaceutical and travel sectors as well as rising shipping costs will be discussed in this article as we uncover how a virus may change trends in supply chains and international trade.