National College of Business Administration & Economics (NCBA&E)

School of Business Administration (SBA)

Name: _________________________________________________ Reg No.: __________________________________

Examination: Final Term Marks: 30%

Course Title: Supply Chain Management Program: BBA / MBA
Semester: Spring 2020 Date: 03 / 06 / 2020
Instructor Name: Mudassar Alvi Time: 150 Minutes

Please read the case and carefully answer the questions given below: - (Marks:30)

COVID-19, A BLACK SWAN EVENT

Managing supply chain risk and disruption

Coronavirus highlights the need to transform traditional Supply Chain Models, this case study
highlights short-term actions companies can take to respond to business disruption and supply chain
challenges from the global spread of COVID-19 ─ and looks ahead to the longer-term solution of
digital supply networks.

Could COVID-19 be the black swan event that finally forces many companies, and entire industries,
to rethink and transform their global supply chain model? One fact is beyond doubt: It has already
exposed the vulnerabilities of many organizations, especially those who have a high dependence on
other countries to fulfil their need for raw materials or finished products.

China’s dominant role as the “world’s factory” means that any major disruption puts global supply
chains at risk. Highlighting this is the fact that more than 200 of the Fortune Global 500 firms have a
presence in Wuhan, the highly industrialized province where the outbreak originated, and which has
been hardest hit initially. Companies whose supply chain is reliant on Tier 1 (direct) or Tier 2
(secondary) suppliers in China have already experienced significant disruption, even if, according to
the most optimistic reports, conditions approach normalcy in China by end of July 2020.

The choking of supply chains is “a second-order problem,” and the foremost priority is to ensure the
availability of medical supplies, Wharton Professor of operations, information and decisions, said in
an interview “The first-order problems have to do with medical devices, medical products, productive
equipment, masks, screeners, disinfectants [and so on], which are critically necessary for providing
care for people we are going to see getting infected over the next few months,” he said.

He noted that the U.S. alone needs a “supply chain ramped up for about 100 million people to get
tested and taken care of,” based on predictions for the number of infections. With social distancing,
the peak demand in the U.S. for testing kits is an estimated 5 million or 6 million, he added.

Getting those testing kits to the right locations across the country is the next big challenge. “This is
why a lot of epidemiologists and supply chain [professionals] are suddenly talking about what we call
flattening the curve, to help with production smoothing,” said Professor. (Production smoothing, or
production leveling, refers to removing unevenness in the supply of intermediate goods in
manufacturing processes.)

Companies operating in COVID-19 impacted countries may take certain measures to protect their
supply chain/ businesses i.e. Educate employees on COVID-19 symptoms and prevention,

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Reinforce screening protocols, Prepare for increased absenteeism, Restrict non-essential travel and
promote flexible working arrangements, Align IT systems and support to evolving work requirements
and Focus on cash flow. Steps may change with different perspective i.e. Enhance focus on
workforce/labor planning, Focus on Tier 1 supplier risk, Illuminate the extended supply network,
Understand and activate alternate sources of supply, Update inventory policy and planning
parameters, Enhance inbound materials visibility, Prepare for plant closures, Focus on production
scheduling agility, Evaluate alternative outbound logistics options and secure capacity, Understand
the demand impact specific to your business, Confirm short-term demand-supply synchronization
strategy, Prepare for potential channel shifts, Open channels of communication with key customers,
Prepare for the rebound & Conduct global scenario planning.

A decades-long focus on supply chain optimization to minimize costs, reduce inventories, and drive
up asset utilization has removed buffers and flexibility to absorb disruptions and COVID-19 illustrates
that many companies are not fully aware of the vulnerability of their supply chain relationships to
global shocks.

Fortunately, new supply chain technologies are emerging that dramatically improve visibility across
the end-to-end supply chain, and support companies’ ability to resist such shocks. The traditional
linear supply chain model is transforming into Digital Supply Networks (DSNs), where functional silos
are broken down and organizations become connected to their complete supply network to enable
end-to-end visibility, collaboration, agility, and optimization.

Leveraging advanced technologies such as the Internet of Things, artificial intelligence, robotics, and
5G, DSNs are designed to anticipate and meet future challenges. Whether it is a “black swan” event
like COVID-19, trade war, act of war or terrorism, regulatory change, labor dispute, sudden spikes in
demand, or supplier bankruptcy, organizations that deploy DSNs will be ready to deal with the
unexpected.

Questions:- (6 Marks for each Question).

1. How COVID-19 has disrupted the Global Supply Chain?

2. How Can Companies respond to the immediate change in Supply Chain?
3. In prevailing circumstances, Medical Equipment and their Supplies have become
priority. Describe an appropriate Strategy for managing Supply Chain of Medical
Supplies?
4. How the Supply Chain Strategy of Companies selling products in COVID-19 impacted
countries will be different from Companies buying products from said countries.
5. Looking ahead, what may be the Imperative for a new Supply Chain Model?

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