A blog post by Hayley Margulis, Junior Associate
Covid-19 has negatively impacted the global supply chain from before the virus became a pandemic. On January 23, 2020, the world saw its first coronavirus lockdown in Wuhan, China. Since China accounts for roughly 20% of global manufacturing trade throughout all nations and is one of the major players in the global value chain, the impact of this lockdown saw rippling effects in all societies quickly.
Currently, ongoing disruptions and shutdowns from Covid-19 continue to impact business and markets worldwide, especially with lockdowns in major global ports such as China, South Korea, and Vietnam. These disruptions cause production delays, goods to pile up at ports, labor shortages, and longer wait times to replenish retail shelves. Larger scale impacts are seen with a great increase in commodity pricing, slower lead times from raw material to buyer, a bigger need to source production closer to the end consumer and relying on technology investments to increase the efficiency of each market’s supply chain.
A recent study from Ernst & Young LLP (EY) illustrates the impacts on supply chains from late 2020 to the end of 2022. The research summarizes that “Covid-19 accelerated preexisting issues in the supply chain and brought priorities such as visibility, resilience, and digitization to the fore… Across the board, protecting, retraining, and reskilling the workforce is a major priority.”
A large part of retraining and reskilling the workforce requires companies to use digital technologies to adapt to changing global environments. From the EY study done in 2022, 63% of key market areas will expand automation and invest in artificial intelligence and machine learning, which will increase efficiency of global supply chain worldwide.This has been largely due to the pressures from the pandemic and will further accelerate into the future. It is now expected that by 2035, 45% of global supply chains will be mostly autonomous.
 Andreas Illmer, Yitsing Wang and Tessa Wong, Wuhan lockdown: A year of China’s fight against the Covid Pandemic, BBC (Jan. 22, 2021), https://www.bbc.com/news/world-asia-china-55628488
 Bonnie S. Glaser and David J. Bulman, China’s Dominance in Global Supply Chains, The German Marshall Fund (Sep. 20, 2022), https://www.gmfus.org/news/chinas-dominance-global-supply-chains#:~:text=Today%2C%20China%20is%20a%20major,that%20are%20essential%20for%20production.
 Six key trends impacting global supply chains in 2022, KPMG (las accessed Feb. 1, 2023), https://home.kpmg/xx/en/home/insights/2021/12/six-key-trends-impacting-global-supply-chains-in-2022.html
 Sean Harapko, How COVID-19 impacted supply chains and what comes next, Ernst & Young (Jan. 6, 2023), https://www.ey.com/en_us/supply-chain/how-covid-19-impacted-supply-chains-and-what-comes-next