Logistics Management

Supply Chain evolution after Global crisis

“COVID-19 & Ukranian-Russian War”

Project Team:
1. Rahma Hassan
2. Muhammad Farag
3. Ayman Bahaa
4. Osama Shaaban

Under the Supervision of Dr. Karim M. Soliman, Associate Professor of

Logistics and Supply Chain Management
Main Challenges Egyptian logistics and supply chains faced due to COVID-19
& Russian-Ukrainian War:

1. Suspension of the oversea trade and Complete closure of boarders along with very
limited Capacity of air flights affected Egypt as one of the top importing countries
worldwide
2. Complete lockdown or Limited capacity for operating manufacturing facilities worldwide
especially in China as per medical procedures issued from WHO leading to severe
Shortage in needed raw materials and finished products.
3. High labor turnover to maintain revenues and avoid severe losses
4. Long supply lead time with high cost & limited availability for essential needs
5. Foreign currency availability dropped sharply due to the fall in Suez Canal revenues, and
merchandise exports during COVID-19 that we recover from up to now.
6. Foreign currencies issues resulted from higher commodity prices due to The Russian-
Ukrainian conflict and unbalance between imports and exports.
7. Supply decline in Wheat, corn, sugar, sunflower oil… due to depending on Ukraine &
Russia as main source for those imports which causes food market supply chain
disruption.
8. Egyptian importers and exporters are unable to cover the premium sea freight costs that
come with competing with the US to get priority in reserving container ships and
shortage of container space available at Egyptian ports during The Russian-Ukrainian
conflict

Conclusively, we will find that Egypt has faced disequilibrium along supply chains, resulted
from supply shortage while increasing demand fluctuations.
In the aftermath of severe disruption from the COVID-19 pandemic & The Russian-Ukrainian
conflict ,Egyptian companies in all sectors planned to shake up their supply chain strategies &
infrastructure to become more resilient, sustainable, agile, and collaborative with customers,
suppliers, and other stakeholders. To do that, they will increase investment in supply chain
technologies, procurement strategies and overall Logistics management strategies to follow the
evolution of Supply chain framework to Value chain methodologies and strategies to change
competition game to be Supply Chain VS Supply Chain by end of 2020 on continuous basis.

Procurement best practices adopted in Egypt During COVID-19 & Ukrainian

war:

1. Securing the sourcing with near-shore and local sourced suppliers to reduce reliance on
foreign suppliers
2. Companies apply multiple sourcing strategies instead of Sole supplier strategy to avoid
supply chain disruption.
3. Looking for alternative sources with less specification but for this option, Value chain
concept must be implemented to align with all organizational departments that might got
affected by this option
4. Companies apply centralized purchasing strategy to achieve economies of scale which
means greater discounts, better terms and Lower delivery costs along with centralized
contact for suppliers leading to better relationships with them.
5. Adopting the concept of Supply chain visibility to drive agility and build resiliency by
implementing all-in-one ERP solutions as SAP, and Oracle which offers  real-time
actionable information integrated with suppliers inventory & operational system
6. Play on SC cost structure to identify main opportunities to work on to Reduce
procurement costs & working capital via changes in payment terms.
7. Price hedging to secure future raw materials prices and avoid inflations that would
disrupt cost structure.
Supply Chains Impact
The COVID-19 pandemic has disrupted global supply chain causing shortages of essential goods
and delays in production and delivery. The closure of factories and transportation networks has
led to a decrease in the supply of goods, while panic buying and stockpiling have increased
demands. This has resulted in higher prices for some products, and shortages of others

Logistics Impact
The COVID-19 pandemic has also impacted logistics, with restrictions on travel and movement
of goods leading to delays and disruptions in the supply chain. The closure of borders and
quarantine measures have made it difficult to transport goods across countries, and the reduced
availability of air freight has made it harder to transport goods internationally.

Role of Supply Chain

Implement Remote Work and Collaboration Tools

Remote work and collaborations tools can help maintain productivity and communications
between team members, even if they are working from different locations due to quarantine
measures or other disruptions

Adaptation and Innovation

One of the key ways in which supply chains have responded to the pandemic is through
adaptation and innovation. Companies have had to quickly pivot their operations to adjust to
changing demand and supply chain disruptions. This has included everything from shifting
production to new locations to implementing new safety protocols for workers.

Collaboration and Coordination

Another important aspect of the role of supply chains during COVID-19 has been collaboration
and coordination. With disruptions affecting multiple industries and regions, effective
communication and cooperation have been essential for maintaining the flow of goods. This has
included everything from sharing information about inventory levels to coordinating
transportation logistics.
Increase Inventory Levels

Increasing inventory levels can help ensure that you have enough stock to meet demand during a
pandemic, when supply chain disruptions can lead to shortages. However, this strategy should be
balanced with the need to manage costs and avoid excess inventory.

Optimize Warehouse Operations

Optimizing warehouse operations can help reduce the risk of infection among workers and
ensure that goods are shipped quickly and efficiently. Strategies include implementing social
distancing measures, increasing sanitation and hygiene practices, and automating processes
where possible.

Potential Solutions

To overcome supply chain disruptions caused by COVID-19, companies can explore several
potential solutions, including:

• Diversifying suppliers to reduce reliance on a single source of materials or goods.

• Investing in digital technologies, such as blockchain and IoT, to improve supply chain
visibility and traceability.

• Collaborating with other companies in the supply chain to share resources and
information and mitigate disruptions.
Role of IT

The Information Technology has an obvious Role in supply chain management in Egypt
specially during the Covid 19 Pandemic , supply Chain issues after the Pandemic and the
Russian – Ukrainian war , as it does in many other countries. IT can help organizations
streamline their supply chain processes, increase efficiency, reduce costs, and improve customer
satisfaction and how it used this to mitigate the disruptions caused by these issues.

1- Telework
Increase the Dependability of the application of social distancing, physical distancing,
the use of technology for communication such as meetings, seminars and others. This is
in line with researchs conducted by Deloitte which states that the latest information
technology trends are inseparable from Digital Reality, Blockchain and Cognitive
Technology which are directed to support the concept of The Business of Technology, a
concept where business and technology teams can work together to deliver results faster
without sacrificing important things that are needed required by the company (scalability,
reliability, security, maintenance, etc.)
The role of technology in crisis management is divided into two, namely the role of technology
in the provision of infrastructure (digital telephones, satellite dishes, scanners, fax machines,
personal computers, local and wide area networks including the Internet, digital cameras,
geographic positioning systems, geographic information systems, programs modeling chemical
dispersions, digital pagers, and portable weather stations) and the role of technology in managing
information flow throughout the crisis management process (mitigation, preparedness, response
& recovery), as illustrated in the following crisis management framework

2- Supply Chain Visibility:

IT can provide real-time visibility into international supply networks, allowing Egyptian
businesses to spot potential war-related interruptions and respond appropriately.

3- Risk management:
IT can assist businesses in identifying and addressing risks related to international trade,
like transportation interruptions.

4- Joining The BRICS Group

There were meetings Between Egypt and BRICS Countries to discuss a range of issues
and topics , including an evaluation of the mechanisms of exchanging the Egyptian pound
with some national currencies for the BRICS grouping by discussing the strength, future
and indicators of the dominance of the dollar in commercial transactions, especially as it
represents 80% of the volume of trade exchange, and 65% of the volume of global
reserves, Moving towards "BRICS" will be an important step to break the dominance of
the dollar, strengthen the economy and save a country like Egypt that imports most of its
food needs. He explained in his interview with Al-Jazeera Net that the most important
element is the exchange of trade in local currencies and perhaps the establishment of a
unified currency later. obtaining soft loans from the bloc's Development Bank, which
helps in escaping from the siege of the International Monetary Fund and its harsh
conditions. The BRICS group has its own development bank, which aims to support
infrastructure projects and sustainable development of the countries participating in the
group.
 5- Making Nafeza Platform

The Egyptian Customs Authority calls on importers, customs brokers and air freight
agents to register in the ACI system through the electronic portal of the “Nafizah”
platform, stressing that no air shipments will be allowed to enter the country as of
October 1, 2022 except by pre-registration of shipments in the ACI system, in
implementation of the provisions of Customs Law No. 207 of 2020 and to eliminate
practices harmful to international trade.

6- Joining Nafeza Application with the electronic Invoice

Networking between the databases of the electronic invoice system and the customs
system (window).no company will be allowed to import, export or deal with the customs
system (window) unless it deals with and issues electronic tax invoices.

How should the logistics, supply and distribution networks look like?

Five Fundamentals of Supply Chain Resilience
Logistics & Supply Chain:
The reaction is not a strategy in the business world. In 2008, we had a recession, in 2011,
tsunami devastated our lives, Ebola rocked the world in 2014, Brexit in 2016, and today, we have
COVID-19. All of these events have affected supply chains drastically.  

Is it possible for businesses to save their supply chain in such events? When we measure the
scale of these events, any attempt to prevent the damage seems frivolous. But if we accept the
very fact that such events are inevitable and so be ready with a plan, then we would be able to
the least reduce the impact of the damage.

This preparation is known as building resilience. Since a supply chain is a big daddy of any
business network, it must be nurtured and protected against any mishappening, small or large.
Developing supply chain resilience could help you continue operations and cope up with the
disruption better than others. 
But the question is where to begin to with? If you are planning to develop supply chain
resilience, you must get yourself familiar with the fundamentals. To help you begin with the
process, here we have compiled the five fundamentals of supply chain resilience. 

1. Redundancy

Where six sigma and lean manufacturing is driving the corporate world, creating redundancy is
like swimming against the tide. But then it has its own many benefits of providing safety shock
in case of slowdowns or completes delivery failure. Creating a supply chain redundancy requires
you to have extra inventory, several suppliers, and many operations staff. It will make your
balance sheet heavy initially thought but in disruption, redundancy will enable you to shift
reliabilities based on new requirements.

Apart from being costly, there are many other drawbacks of redundancy in the supply chain. It
will reduce the overall efficiency and lead to sloppy operations. But the recent chain of events
has apparently thrust the requirement for creating redundancy on organizations.   

2. Flexibility

While many businesses are reluctant to creating supply chain redundancy, they are more open to
the idea of flexibility. A flexible supply chain provides businesses with the ability to change and
implement strategies as per the demand during the disruption. There are two key ways you can
maintain flexibility throughout the channels.       

Standard Processes: Standardizing the process provides an edge in building supply chain

resilience. Standard processes across the multiple production floors, interchangeable or
interoperable parts and identical processes fulfill the mobility requirements during the disruption.
Actually, a similar process means operations employees are familiar with the common structure
of how things work in the system. With little training, they can be fixed into other processes thus
enabling the company to respond quickly. 
Coexistence: Coexistence is relative to flexibility. If you follow a sequential process for cost-
effective reasons, then switching to a concurrent process might be strategic and beneficial but is
costly. 

For example, let us assume that you are building a product, and simultaneously you also build
your team of marketing and sales professionals for the same project. The key benefit would be
that it will give you a fair idea of how customers respond to your product in real-time so that you
can make the necessary changes. So if you are going good and strong in your product
development process, then you might consider the team as an added burden but when there is a
difference between your idea of the product and the market response, then it is a savior. 

In the same way, aligning sales and engineering functions with the supply chain will provide you
with the key information that could save you from the disruption. 

3. Nurturing Supplier Relationship

How much do you know about your suppliers plays a key role in building resilience against
disruption? The knowledge is not limited to their production capability but more importantly
their balance sheet and the key people who are making decisions for the business. When you
have that kind of relationship with your suppliers, you get to know how they operate and their
strength which could protect you in disruption and simultaneously their weaknesses which could
disrupt your processes. 

4. Cultural Change

Businesses are run by people. And everyone who is employed by the company is the partner in
growth or disruption or losses. It is therefore important that the company keep every employee
aware of even minute change in the process, be it in strategic goals or day-to-day challenges in
the operations. When employees will have their own first-hand experience of change, they will
take less time to adapt to the change and in a position to make better decisions in the face of
disruption.       
5. Empowered Teams

Disruption does not happen overnight. The process of disruption starts long before it takes an
enormous form. When your team is empowered, they have visibility to see the elements of the
supply chain that may cause disruption. For example, if there are price fluctuations in raw
material or quality issues, good visibility into the processes can help you identify red flags in the
system. 

Is your team empowered to identify those red flags? Field representatives are a key part of your
supply chain system. When you empower your field representatives by providing them with the
right digital tools and technologies, they can help you collect data that can generate insight,
which enables you to find the weak spot in the supply chain. 

Final Thoughts

The benefits of building supply chain resilience are huge. It makes your processes stronger and
protects them from upcoming threats. However, it involves a lot of planning, technology, and
practical training to build a robust supply chain that could withstand any kind of unforeseen
circumstances.
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