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Coronavirus and Supply Chain Disruption: What Firms Can Learn

Businesses dependent on global sourcing are facing tough choices in crisis management

Knowledge at Wharton
Wed, 05/13/2020 - 12:02
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Long stretches of empty supermarket shelves and shortages of essential supplies are only the visible impacts to consumers of the global supply-chain disruption caused by the Covid-19 pandemic. Unseen are the production stoppages in locations across China and other countries and the shortages of raw materials, subassemblies, and finished goods that make up the backstory of the impact.

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The Coronavirus Disease 2019 (Covid-19) outbreak is unprecedented in its scale and severity for humans and supply chains, not to mention medical professionals and governments scrambling to contain it.

Businesses dependent on global sourcing are facing hard choices in crisis management amid the supply chain disruptions. But in planning to mitigate the risks of similar disruptions in future, they confront other questions that have no easy answers: Should they broaden their supplier choices, or do more local or near-shore sourcing? How much inventory of raw materials, subassemblies, and finished products should they stock to tide over the crisis?

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