Assessment of Risks Posed by Covid-19 Pandemic to Global Supply Chains

Abstract

The present research aims to develop a new supply chain risk management framework for managing risks posed by Covid-19 pandemic. Literature review helped to formulate six research hypotheses which were tested using surveys conducted with employees in manufacturing sector in the UK. Regression analysis and Pearson correlation were used to address the research hypotheses whereas research reliability was tested using Cronbach’s alpha. Research aim was addressed through focusing on four research objectives.

The first research objective was to analyse the supply side risks experienced by businesses during the pandemic. The three supply side risks uncovered through the literature and tested in this study (first three research hypotheses) included (1) Shortage of material (supplies) and higher lead time, (2) Logistic bottlenecks in the supply chain and (3) Lack of preparedness of business managers. The second research objective was to review the demand side risks experienced by businesses during the pandemic. An important demand side risk uncovered through the literature and tested in this study is that fluctuations in demand and resultant uncertainty is an important supply chain risk experienced by businesses during the pandemic.

The third research objective was to evaluate the risks associated with a lack of supplier engagement and their impact on supply chains of businesses during the pandemic. The two risks relating to supplier engagement uncovered through the literature and tested in this study (research hypotheses 5 and 6) included that lack of engagement with the suppliers increases the risk of non-delivery of supplies and lack of engagement with the suppliers increases the risk of inability to negotiate competitive and attractive terms of the contract.

The final research objective was to provide a framework that can help manufacturing companies to address Covid-19 type event in the future through recommendations on how businesses can improve their supply chain risk management during and post-pandemic. Recommendations to overcome the risks include postponement, hedging and sharing / transfer of risk. The feasibility and effectiveness of these recommendations are also detailed