Similar to its global counterparts, supply chains in Pakistan have faced disruptions due to the advent

of the COVID-19. These disruptions have further aggravated the problems caused by the bullwhip
effect, a phenomena that has long haunted the business environment of Pakistan. Be it the country’s
agricultural sector or its manufacturing sector or its retail industry, all have faced the brunt of the
bullwhip effect specially during COVID-19. The supply chains within the country struggled to cope
with the demand shocks broadly due to the tendency of the local populace to engage in ignorance,
arrogance, negligence, indifference and avoidance (cite karna hai). These behavioral biases
ultimately result in poor demand forecasting, order batching, price fluctuations and rationing.

In the country’s manufacturing sector, the industry most susceptible to harm by the bullwhip
phenomena during COVID-19 was its pharmaceutical industry. As the country moved towards a
lockdown and the awareness about the virus rose, so did the demand for medicines and healthcare
products such as sanitizers, soap, liquid handwash and masks. The increase in demand was met with
a shortage in supply which ultimately resulted in price hikes. Such price fluctuation led to
pharmacies and retailers exaggerating their need for the products, which ultimately led the
manufacturers into ordering chemical excessively. As the lockdown eased and the masses realized
that the COVID-19’s first wave had a minimalistic impact on the country, their demand for such
products dropped, leaving both manufacturers and retailers with excess inventory on hand.
However, as the second wave has begun to gain momentum, the demand for the product has been
on the rise yet again, and history suggests that due to the lack of coordination between supply chain
players and low levels of technological sophistication, the industry’s supply chain is bound to suffer
from a similar ripple effect. Besides the pharmaceutical sector, the country’s textile sector
experienced a similar problem due to the existence of order batching and poor forecasting. With a
sudden lockdown imposed, large clothing brands withdrew their demand for raw materials as they
had anticipated that the demand from consumers would reduce. Similarly, with transportation bans,
the country’s textile exports also slowed down, further reducing the demand for raw materials.
However, with consumers avidly shifting towards online purchasing, the demand for clothing did not
decrease in the domestic market as the manufacturers had anticipated. In fact, with the coronavirus
depicting even worse consequences in other parts of the world, the export orders were diverted
towards Pakistan where the COVID-19 had caused little damage. Thus, as soon as the government
eased the lockdown and allowed production to restart, large apparel producers engaged in periodic
ordering, sending a ripple effect on the upstream side of the supply chain. In addition to the
country’s manufacturing sector, the bullwhip effect also came in full swing in its retail sector,
especially with regards to large supermarkets. With manufacturers of various products anticipating a
drop in sales, they offered their products at large discounts, instigating forward buying by retailers.
However, with demand from consumers remaining relatively stable and the reduction in operational
hours as per government directive, there was a shortfall in revenue of these outlets and they were
ultimately left with large stocks in inventory. In addition to the retail industry, Pakistan’s agricultural
sector suffered the most as a result of inefficiencies in supply chain.

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