Read how the COVID pandemic affects supply chain management...
Most countries would not have been able to foresee the possible supply chain effects as a result of the COVID-19 pandemic. In real terms, the knock-on effects of the pandemic severely restricted travel and commercial activities.
While the European continent started to hear about the emergence of the Asia-based COVID-19 in late December 2019, it wasn’t clear then how it may affect the immediate geographic area. Within a very short time, everyone from citizens, buyers, sellers and people involved in commercial activities were made very aware of how real this situation was and how big an impact it was going to have on life and business.
Greg Smith, on The Institute of Supply Chain Management’s recent blog, states “If you look at China, when the virus broke out in the city of Wuhan, it rattled global . Hundreds of international firms have direct suppliers within the impacted areas around Wuhan, and this has affected logistics within China, and subsequently, the rest of the world. It became clear – companies must implement supply chain risk management and business continuity strategies as a priority.”
Suddenly, supply chain management became one of the most crucial aspects to retain our lives during the lockdown.
Initially supply shortage was a real problem, especially for goods sourced from China. Then, the supply chain system was affected by the sudden, extra demand. This caused systematic demand shocks, where people were stocking up on goods, such as toilet paper and flour, to make sure that they had enough of what they needed during the lockdown.
The food and drink industry was acutely affected, including packaging suppliers and manufacturers, such as Aegg Creative Packaging. At the time of writing, it is possible that there is a second wave of the pandemic looming in Europe, so the key area to focus on going forward is developing robust demand plans. It is going to be quite tough to predict how consumers will react in the short term. However, in order not to play a ‘shortage game’ with food manufacturers and end customers, the food and packaging industry as a whole needs to develop a new normal supply chain process.
Aegg faced two different situations during lockdown, directly correlating with the product mix. Drinks consumption in glass bottles mainly happens at the point of sale, predominantly within the hospitality sectors, including hotels, restaurants and pubs. This area was obviously affected by the lockdown, with many of these businesses temporarily closed, so the demand for our glass bottles decreased.
On the other hand, the demand for Aegg’s glass jars increased. As consumers bought more food in glass jars (such as pasta sauces and jams) than they needed during normal times, this caused a higher demand for the jar sector.
- Additional warehousing
- People and Skills
- Sourcing additional suppliers
- New supply chain technologies
If you would like to find out more about Aegg’s supply chain measures, or packaging products for the food and drinks industry, please get in touch.