INGENIERIA INDUSTRIAL

Research Paper
INGLES TECNICO

Flores Rodríguez Leonardo

Semestre VIII
IND 8-1

“Los alumnos declaran haber realizado el presente trabajo de

acuerdo con las normas de la Universidad Católica San Pablo”
 The importance of managing the global supply chain in the face of the
pandemic

Justification: This work was carried out due to the importance of familiarizing
ourselves with information in English to carry out future research such as our thesis
and the research was also carried out to learn more about the supply chain and what
measures or actions must be taken to future eventualities.

Objectives:
I. General objective: determine what measures to take for the proper functioning
of the supply chain
II. Specific objectives:
 Review the best methods for forecasting in the future
 Recommend the best measures.

ABSTRAC
The World Health Organization (WHO) declared a public health emergency of
international concern over the global outbreak of the novel COVID-19 virus originating
in Wuhan, China (January 30, 2020). Which has been progressing rapidly as shown by
the different months lived so far, causing the current global crisis, with important
economic consequences, negative social and health impacts.
The different companies in this situation have had to modify the supply, sales or even
production strategies because most of the theoretical models in the existing literature
have not been able to capture these interruptions, which is why companies do not
have strategies to deal with them. mainly companies with a complex supply chain.
With this work, it is expected to give a greater vision with different actions taken in
different parts of the world to make good decisions regarding the correct management
of the supply chain.

KEYWORDS: Supply Chain Management, Lean, Just in time, Performance, COVID-19,

crisis, research propositions.
BODY
First, a small definition of what a supply chain is for the different authors (Free &
Hecimovic, 2020) "Supply Chain Management (SCM) incorporates the range of
activities coordinated by an organization to acquire and manage supplies", (Sharma,
Adhikary, & Bikash, 2020). " A supply chain involves all the parties that, directly or
indirectly, satisfy a customer's request ”.
And more modern SCM approaches in the interdependence of organizations working
collectively to improve the efficiency of all links. This expanded scope fosters synergy
and cross-functional collaboration between all partners to achieve more effective and
efficient supply and integrate customers, suppliers, manufacturers and other value
chain players across all company functions. Following these initial concepts (Koncar,
Grubor, & Vukmirovic, 2020) affirms that “A supply chain consists of all the parties
involved, directly or indirectly, in the fulfillment of a client's request.” Another point is
the correct selection of suppliers that you should consider to ensure that the
relationship between customers and suppliers does not depend only on costs but also
on other factors such as quality, delivery time and flexibility of the product. Everything
mentioned applies differently to companies.
Due to the pandemic and as there was no cure, vaccine or confirmed therapy for the
coronavirus, the countries, in accordance with the WHO recommendations, had opted
for various forms of social distancing, reduced contacts and complete isolation. As a
result of the measures taken, the trend of exponential growth of the infection has
been partially slowed, however, such measures have caused a significant decrease in
commercial activities in certain sectors, such as tourism, hotels, hotels, among others. .
The COVID-19 crisis has revealed the fragility and exposed the vulnerability and low
resilience of global supply chains. In addition, the pandemic created a problem that
simultaneously affects supply and demand, making it more difficult to respond
successfully. First, there was an impact on supply. Then there was a significant increase
in demand with the implementation of containment policies. (Fonseca & Azevedo,
2020) comment:

The governments' first concern was obviously addressing the health problems
of COVID-19 by imposing social distance restrictions on the population,
increasing hospital capacity, and gathering medical supplies, tests, and
equipment (for example, ventilators). However, selecting new qualified
suppliers to make up for missing deliveries is not an easy task, especially in long
global supply chains, which have proven to be the most vulnerable. As the
 distance and number of players increases, so does the overall chance of
disruption. (p. 3)

A clear example is the fall in industrial production in China, a fall of 13.5% in the first
months of 2020 this affects the supply chain in different parts of the world.

Illustration 1: China's annual production

Note. From: Impact of Covid-19 on Supply Chain Decisions: Strategic Information for
Companies
NAS-DAQ 100 using Twitter data

With globalization, companies can move production where it is most efficient, people
can travel anywhere, and money can flow freely. However, countries are already
assessing how much they depend on other countries and are assessing what critical
technologies, critical resources, and manufacturing capacity they want to retain. (Free
& Hecimovic, 2020) mentions:
The Trump administration adopted this move of not relying so drastically on
materials outside its borders and other countries are following that path, for
example, “France's finance minister ordered French companies to re-evaluate
their supply chains to be less dependent. from China and other Asian nations ”.
(p. 9)
Governments could shift to regional trading blocs, and there will be a greater emphasis
on companies increasing the resilience and redundancy of the supply chain. Find local
suppliers or start certifying them if necessary create good all this would apply in the
future. As mentioned (Fonseca & Azevedo, 2020)

Most of the companies today have implemented just in time to their supply
chains. Lean principles, when applied between the various echelons of the
 supply chain effectively, will generate potential benefits for all stakeholders. In
fact, minimizing waste while making the right product available to the end
customer at the right time and place, that is, according to just-in-time
principles, can lead to unequivocal improvements in performance. The overall
goal is to optimize activities throughout the supply chain from the end
customer's perspective. (p. 5).
As we can see, this type of methodology that focuses on eliminating all inefficiencies
and waste throughout the supply chain can work against it because they leave a lower
margin of resilience at the cost of reducing costs. According to (Fonseca & Azevedo,
2020):

In this context, some companies might consider moving from a `` just-in-time ''
to a `` just-in-case '' methodology and maintain enough inventories to reduce to
cope with the uncertainties of supply and demand. and focus on balancing
efficiency with flexibility, resilience, and overall reliability. supply chain. (p. 10).
This just-in-case methodology would require more safety stocks to address possible
delays in deliveries, which represents a greater amount of costs, but they would be
justified as long as a balance between efficiency and resilience is maintained
depending on the business sector.This could be applied to the future to be prepared
for contingencies
Another factor to take into account is the resistance of the supply chain, the measures
taken regarding this factor are from the simplest as a double supplier for its raw
material, increasing the inventory of high-turnover products or increasing the number
of suppliers, reduce the number of unique products or regionalize your supply chains.
The authors (Fonseca & Azevedo, 2020) propose two new KPI’s to consider:
Recovery Time (TTR) which is "the time it would take for a particular node, a
provider facility, a distribution center or a transportation center, to restore to
its full functionality after an interruption"; and the Survival Time (TTS), which is
"the maximum duration that the supply chain can match supply with demand
after a supplier or node is disrupted." If TTS is greater than TTR, the disrupted
site is no longer a risk. that while it recovers, the company can still match
supply with demand. However, if TTS is smaller than TTR, there will be a
disruption in the supply chain with operations and financial problems for the
company. (p. 12) .

Furthermore, while a “just-in-time” company outperforms another that runs a “just-in-

case” inventory management system, it is up to each individual company to choose the
system that works best for them. Businesses may decide to keep inventory just in case
critical items in a post-crisis world while relying on just-in-time inventory to fulfill less
frequently occurring customer requests. It should also be noted that some companies
were able to adapt to the pandemic environment and improve and improve their
agility and productivity, connecting with end consumers and maintaining their
liquidity, for example, by resorting to electronic commerce. An example gives us
(Handfield, F Inkenstadt, & Schneller, 2020):
It's how leading retailers, with physical stores closed, by focusing on their sense
of purpose and improving speed, strengthened e-commerce capabilities, turned
to online and direct-to-customer sales, and delivered food to customers
confined to their stores. homes in Australia. (p. 16)

Finally, it is expected that once the pandemic is over, they will have learned from the
situation and will ensure that they can react quickly and adopt solutions in the event of
a crisis, the different countries, especially the health sector, and governments will
increase spending in the sectors. of health and social care. Although it is true that
supply chains are broader throughout the country, we are expected to learn from what
we have experienced and take action in the event of all kinds of eventualities.
Conclusions

Management of the supply chain is recommended according to the experience lived as

the constant evaluation of the supply chain to continue with the production and
supply. Generate alliances with suppliers of critical products and assess their ability to
maintain continuity of supply, improve the resilience of the supply chain. Improve
redundancy, especially for suppliers and critical parts, components and products.
Increase the stock levels of spare parts, components and critical products and it must
be recognized that this represents an increase in costs and someone will have to pay
for it. And in terms of demand, having greater visibility of it is fundamental, which is
why it is due to rely on other digital communication channels, for example or digital
platforms.
While decades of optimization have enabled companies to reduce unit costs in the
supply chain, these gains come at a cost. COVID-19 has exposed how global supply
chains are fundamentally unresponsive to changes in geopolitics or customer demand.
The pandemic is likely to drive a growing shift in national manufacturing sovereignty,
but the extent of these localization trends remains to be seen. Accelerating end-to-end
digital transformation, on both the demand and supply sides, means that consumers
will have to adapt to the contactless economy, lower-cost supply chains, and put an
additional emphasis on service levels. In addition, governments will strengthen the
focus on the health sector supply chain and increase spending in the health and social
care sectors Simply put, the longer, more concentrated, less transparent, and more
price sensitive the supply chain, the more challenging it will be to adapt to new
pandemic realities.
Therefore, it is recommended to develop a multisectoral study (traditional and non-
traditional sectors) and segmented by different dimensions, for example, type of
product (complexity, level of consumption, level of customization), type of market
(local, regional, national , global), degree of technological sophistication (maturity and
availability of the processes used.

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