Global Supply Chain, Another Facet of the Crisis

How much could the world pattern change after this crisis?

Is this crisis mixed with the energy crisis vs. green and alternative energy?

The global supply network, like many of the economic activities it supports, has developed strategies, processes and mechanisms that have allowed it to achieve high levels of efficiency, minimizing downtime in all stages of the supply route, developing routes, intensively using technological advances in its warehouses and distribution centers, as well as combining means of transport that have allowed it to reduce costs and prices of its services for its customers

The level of development and efficiency that this vital economic sector has achieved has been key in the level of economic globalization that we know today. There are iconic examples of global companies that have decided to leave full control of their supplies in the hands of logistics companies to focus on their “core business”.

The companies that make up this global supply chain have weathered the economic crises of the past with remarkable success, facing together with their customers the strong fluctuations, sometimes in supply, sometimes in demand, and returning to normal as soon as possible. economic conditions are restored.

What is happening today with this activity in face of the pandemic that has not yet finished?

Is the supply chain responding adequately to the current needs of the global economy?

Has this sector been able to recover and face the new challenges, as it did in the crisis of the past?

One of the phrases that have become fashionable to try to synthesize the current problems faced by this activity is the “shortage of containers”. The saturation of the main ports both in China, which has 8 of the 10 largest ports in the world, as well as the European and the United States.

The structures of the Supply Chains were successfully able to adapt and anticipate trends in demand, in its increase or contraction. This worked well in a decentralized scheme in the dispersions that were reflected in changes in demand. In the condition that all the elements individually were coupled to the trend. Processing demand trends without significantly affecting the Procurement was the global success.

However, the need for a system that could be adjusted in a timely and efficient manner to demands greater than the previous deviations, derived from a consumption capacity with minimal global decline, a decrease in human resources in any of the crucial elements of the chain, bottlenecks with no alternative outlets.

The discontinuous opening of the different actors in the supply chain, coupled with insufficient capacity to process all signals as a whole, and the push from demand to supply, are obstacles that cannot be overcome in the short term and This directly affects the global economic recovery.

It is a very special event in the aforementioned variants since the push in demand for certain products and services are directly affected, causing a delay or shortage, even in intermediate goods.

From the perspective of the economists who spoke in their predictions of different types of recovery: V, VV, U, etc. For a long time they were out of reality, now the global economy looks more like a war economy than a traditional recovery stage.

What ingredients are we talking about? Of the monetary policies of direct support to the companies, the restrictions experienced to the free movement of people that originated a high domestic saving, the continuity and increase of fiscal expenses; All of them are significantly pushing inflation, stagflation, and in some cases it seems deflation in a world where there is liquidity, strong asset prices, and demand that is outstripping supply. All of this shook the most vulnerable points in the supply chain, causing a huge imbalance.


Until when will this imbalance be compensated?

Today it is a very important limitation in world economic growth due to supply. And now more variables are being incorporated into this equation, the supply and cost of energy.

It is clear that investments not contemplated or mentioned before this crisis will be required. And that, without these investments, which are required immediately, they will not be able to stabilize the Supply Chain and lessen the slowness of the Economic Recovery. There are two main areas of Investment: In the Supply Chain and in the transition to Clean Energies. Everything indicates that this crisis will be feeling into 2022.

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