Covid-19 Impact: Demand & Supply - Who's Affected Most? - Essay Sample

Introduction

The speaker asserts that Covid-19 has affected both demand and supply; however, there is more effect on demand because of extreme recession as a result of measures put in place to mitigate the spread of the virus and fear. In my opinion, the pandemic has a considerable impact on both demand and supply because many businesses and other economic activities across the globe were put on hold.

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Who would be more affected by business disruption from Covid-19, 1st Tier suppliers, or upstream 2nd Tier suppliers, and why?

Upstream 2nd Tier remains the most affected levels of the supply chain. It is severe at these levels because the impact causes a series of increasing shortages of goods towards upstream 2nd tier suppliers. Small suppliers at these levels of the supply chain are unable to sustain the severe impact of the situation like the current one; therefore, they remain the most affected.

Why "Just-in-time" inventory system causes weakness to business during supply shortage?

Just in time (JIT) inventory is a concept of producing goods as per the number of orders; this causes low inventories. JIT, therefore, causes shocks on supply and demand hence weakening the underlying businesses. In a period of shortage in supply, Just in time, inventory can leave manufacturers unable to attain demand needs leading to an economic downturn.

What do suppliers mapping mean and why it is of critical importance in the current situation?

Supplier mapping involves engaging across suppliers and companies to identify the exact source of shipment, raw materials, and other processes involved in the market. It is important in the contemporary situation because companies can use it to understand the impact of Covid-19 on various aspects of their operations, such as a source of raw materials, distributors, and customers and identify possible alternatives to use in case of failure.

Explain the diamond structure in the supply chain.

It is a supply chain structure where one or more firms use multiple 1st Tier who, in turn, depend on limited 2nd tier suppliers, and all of them are using the same source or 3rd tier supplier. It is a complex structure because the firm may perceive that the supply chain consists of multiple and diversified suppliers; however, these suppliers rely on one or limited suppliers in the upstream.

What does supply allocation mean during supply shortage?

It serves a critical role when there is a limited supply. A certain product may be a key input in different places. Therefore, a supplier can use supply allocation to identify the most important points in the supply chain where the product is necessary based on critical aspects of business, such as costs, dependency, and equity. During supply shortage, therefore, a company can supply the product effectively to sustain the situation.