The Effects of Covid-19 on Supply Chains and How Simulation can help

Coronavirus cells in microscopic view. Virus from Wuhan casusing pandemic around the world. 3D render

The outbreak of Covid -19 has been the most defining occurrence in 2020 and its impact is been felt across all industries including the manufacturing industry. Its effects on manufacturing and production facilities have been varied depending on the nature of the product being produced. For discrete manufacturers in affected regions, daily operations are slowly grinding to a halt while for restaurateurs, it has proved to be a boon.

Meituan, one of the biggest food delivery companies in China, claims it receives four times more request than it before Covid-19 but there were challenges and the challenge? Delivery requests have become more difficult to fulfill as the Coronavirus has reduced the efficiency of its supply chains. Meituan’s case highlights the challenges enterprises currently face with handling logistics and managing supply chains in a time like this.

Since the spotlight was placed on the novel Coronavirus early February, US companies had begun to note its effects on global supply chains and strategize on limiting its effects on trade. Now, with the announcement of a few cases in the US, its effect on supply chains may become local. The reported case of an employee at ‘Amazon Brazil’ offices in Washington and the corresponding quarantine period of that facility mean an enforced downtime will occur. Thus, affecting optimal deliveries or the supply chains associated with that particular office.

The Challenges Coronavirus Introduces to Supply Chains

The ‘Corona leg-shake’ which has gone viral provides the perfect background for exploring the challenges coronavirus brings to supply chains. First and foremost, direct human contact using bare hands is not recommended and this makes things difficult for a large percentage of couriers that support the local supply chain.

The fact that the virus survives for hours on surfaces also puts shop floor pickers and employees at risk. Thus contact of any kind with bare surfaces such as material handling equipment is being shunned by most people. Coronavirus is also a novelty and lack of information about how it spreads has made many consider putting on surgical masks to avoid contamination. These limitations have led to reports and deductions showing that Coronavirus may shut down supply chains by mid-March which will force thousands of enterprises to halt operations.

One example of the effect of these challenges is Fiat Chrysler Automobile temporarily halting operations in Serbia and other locations in February. Others such as Hyundai are also expected to temporarily stop production due to breaks in their supply chain which affected their ability to source parts from China.

Mitigating Supply Chain Challenges with Simulation

Simulation provides enterprises with an assessment and predictive tool to determine the impact of the Coronavirus to their supply chains. In this case, simulation software can be used to evaluate various strategies to keep logistics and supply chains running at some capacity.

In a worst-case scenario where economic activities are suspended, results from simulations will help manufacturers come up with effective strategies for managing available inventory. This will ensure production continues for as long as possible until a resupply line can be established.

The use of simulation alongside interrelated emerging technological solutions such as robotics, autonomous vehicles, and drones could help ease the movement of supplies across local communities. These solutions could also ease fears about having to make contact with couriers or delivery men when taking possession of an order.

Simulation software can ensure the impact of unmanned delivery systems can be assessed and new delivery routes planned before implementation. For example, with Simio, Coronavirus can be modeled as a system dynamics problem alongside supply chains. Modeling the propagation of the virus and its effect on supply chains will provide multiple results on how best to keep supply chains functional if the virus continues to spread.

Simio offers two system dynamics features which make modeling the propagation of the Coronavirus and its effects possible. The Infection Propagation Using Continuous Flow, models disease propagation and it can also be applied by scientists in the healthcare industry to understand available patterns about its spread.

In Summary, government agencies believe the Coronavirus could have a major effect on manufacturing on a global scale for months. This leaves the task of keeping supply chains working in the hands of manufacturing stakeholders and relying on simulation can ease the difficult decision-making process ahead of everyone involved with manufacturing. This article focuses on Coronavirus and its effects on supply chains and does not seek to provide health tips on dealing with the virus. Staying informed and following the directions provided by healthcare and agencies concerning working in public facilities is what we recommend.

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