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Sault College

Global Business Management Semester-1

Principles of Sustainability and Social Responsibility (GBM-103)

February 4, 2022

Table of Contents
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Identify and Describe the Issues…………………………………………………………. 3

Identify the Stakeholders Involved………………………………………………….……. 4

Identify the Implications for Business……………………………………………….…… 4

Evaluate the Editorial………………...……………………………………………….…… 6

Conclusion…...............................................................................................................7

References.…………………………………………………………………………………. 8

Identify and Describe the Issues

 With the rapid increase in Covid19 pandemic, several industries have been shut

down in the lockdown there was very less demand due to which many industrial

activities also got reduced but when the lockdown lifted there was huge boost in

the consumer demand which led to supply chain crisis which is still struggling to

bounce back to prior position. Due to this, in the UK, Brexit company has been

facing a huge shortage of truck drivers as a result the country is facing large

backlogs of ports. And due to which there is a huge shortage of chip, and this

issue creates difficulties for various automobile companies.

 Unfortunately, this problem is increasing, and it will get worse in the future

“Border controls and mobility restrictions, unavailability of a global vaccine pass,

and pent-up demand from being stuck at home have combined for a perfect

storm where global production will be hampered because deliveries are not made

in time, costs and prices will rise, and GDP growth worldwide will not be as robust

as a result.”

 Congestion and blockages have affected various sectors, services and goods

ranging from electric equipment and autos (with issues make worse by the

notable semiconductor chip deficiency) As supply chain crisis affects the growth

of the economy and society faces various difficulties. Businesses have to bear

losses due to shortage of material. Shortage of electronic chips is a big issue for

industry like automobiles and equipment. It also hampers the earning of the

business industries which overall effect the growth of economy and lead to

various societal issues.

Identify the Stakeholders Involved

The economic and business effects of the Covid-19 are being felt throughout

the supply chain. Shippers, retailers, third-party logistics providers are finding hard to

adjust and lead to disruption in supply chain industry.

As the entire supply and demand equation for transportation continues to

alter, shippers and third-party logistics providers are testing market pricing and

adding to their pool of carriers. The sector is transforming at a quick speed then

expected by companies. The supply and demand relationship are in a constant state

of flux, and the balance has moved unexpectedly. As a result, it's been a particularly

testing period for them.

Retailers faced issues during lockdown announced by government and during

transition of online business. Customers stopped going to stores and few retailers

couldn’t transition from brick-and-mortar stores but some succeeded with e-

commerce model but they are facing logistical challenges such as inventory

management, timely delivery and so on.

Identify the Implications for Business

The implication for the business system to provide operating procedure in

order to perform task would be difficult especially during Covid-19 period as market

scenarios keeps on changing and business have to change accordingly. Please find

below possible effects on business system:

1. In order to perform operational risk assessment on critical business functions, it

will be tough to quantify data in ever changing scenarios for businesses.

2. Companies have to be ready for unforeseeable situations such as IT systems

breakdown, high rate of employee turnover, flexible working arrangements and

so on.

3. Businesses have to be prepared for change in global scenarios and update their

policies & forecasting parameters accordingly or there will be at risk in case of

any change in business landscape.

The implication for supply chain industry is to safeguard their operational

sustainability and workers safety, which is threatened by shock in sector. Currently

industry leaders focusing on short term plans but they will also need to prepare long

term vision. Please find below some implications on industry:

1. If transparency in multi-tier not formed, it will affect critical components of supply

chain than it will be hard to identify alternative source at last moment and

ultimately hampering deliverables.

2. Company needs to identify inventory required in value chain such as spare parts

and after sales stock to keep factories running or else product won’t be delivered

on time to customers.

3. Identify and obtain logistical capacity including predicting requirements, and

being flexible in transportation route as needed in order to deliver on schedule.

4. It will impact cash flow and working capital in case accountancy practice not

followed leads to financial impact and non-payment of dues.

Evaluate the Editorial

1. Editorial looks detailed, fair and unbiased about global supply chain got severely

disturbed in 2020 and lead to decline in global growth. Writer is unbiased towards

any country or company, fairly represented current global issue in supply chain,

and article published at correct time of global disruption in the industry.

2. In our opinion, Editorial portrayed valid bottlenecks faced by supply chain industry

and, due to that customer is facing several troubles such as price surge of

products, unavailability of goods and services, and so on. Also, earnings of

multinational companies hampered and due to that, companies are not hiring.

Hence, job market is also impacted. It is a domino effect on business and society

because of supply chain disruption.

3. Editorial writer did support a position as supply chain bottlenecks likely to

continue in the short-term period especially in case of another variant or wave of

corona virus. Counter argument in the article is some issues such as lack of labor

availability will be resolved quickly but some industries may be affected for a

longer time compare to others.

4. The editorial didn’t mention about longer wait times caused by border restrictions

and custom clearance increasing waiting period of products further hampering

supply chain industry.

5. Retailors are key stakeholder ignored in the editorial. They play an important role

in the supply chain, serving as a link between end users and producers. Retailers

build a diverse range of things for sale by combining inventories from several

sources. Walmart has thousands of items in the store. Retailers provide

consumers with convenient shopping experience and competitive pricing. It is

vital for a company to have engagement with retailers especially during supply

chain disruption period.

6. The counter argument of editorial is many big organizations operated

warehouses with outdated technology resulted in fragmented and unintegrated

flow of information leads to higher expenses, higher inventory, worse supplier

relationships, and poor customer experience. Companies didn’t invest in

warehouse and inventory management, also pressurized supply chain in recent

times also hampered global growth.

Conclusion

The rapid spread of the Covid-19 virus in 2020 prompted shutdowns of

industries around the world and, while most of us were in lockdown, there was lower

consumer demand and reduced industrial activity. This has led to problems for many

manufacturers and distributors who were unable to produce or supply as much as

they can for the pre-pandemic period because of various reasons like lack of raw

material and insufficient workers. Different parts of the world have experienced

supply chain issues that have been intensify for different reasons, too. The global

economy shut down exposed obligation in the production strategies and supply

chains of firms just about everywhere. Temporary trade restrictions and shortages of

pharmaceuticals, critical medical supplies, and other products highlighted their

weaknesses.

As the mobility was restricted to cross borders and unavailability of global

vaccine pass have resulted in the hampering of the production because deliveries

are not made in time, costs and prices will rise, and GDP growth worldwide will not

be as robust as a result. As a consequence of all this, manufacturers worldwide are

going to be under greater political and competitive pressures to increase their

domestic production, grow employment in their home countries, reduce or even

eliminate their dependence on sources that are perceived as risky, and rethink their

use of lean manufacturing strategies that involve minimizing the amount of inventory

held in their global supply chains. The challenge for companies will be to make their

supply chains more resilient without weakening their competitiveness. To meet that

challenge, managers should first understand their vulnerabilities and then consider a

number of steps and some of which they should have taken long before the

pandemic struck.

References:

https://www.cnbc.com/2021/10/18/supply-chain-chaos-is-hitting-global-growth-and-

could-get-worse.html

https://hbr.org/2007/09/are-you-the-weakest-link-in-your-companys-supply-chain

https://smc3blog.com/carriers-shippers-and-other-supply-chain-stakeholders-look-to-

transportation-technology-solutions-during-coronavirus-pandemic/

https://www.mckinsey.com/business-functions/operations/our-insights/supply-chain-

recovery-in-coronavirus-times-plan-for-now-and-the-future