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Supply Chain chaos: Time to widen global supply chain

  Did you find empty shelves in stores while shopping recently? Faced delayed delivery on your ordered product? What’s the reason for all these you feel? Is it all due to China, as the country is often regarded as World’s Factory in manufacturing goods? Honestly not! China alone can’t be blamed for this. This is known as SUPPLY CHAIN CHAOS. Not a deceit theory though! Lack of substitutes, lack of predictions and preparations are the accompanying reasons for this existing crisis. With economical labor and low taxes, China produces 28.7% of the world’s goods and exports $2.6 trillion worth products every year. So companies reliably outsource manufacturing to China. When Coronavirus spread throughout China in 2020, the factories were bound to shut down, stopped providing goods, hence fell short of supply. Soon after the virus spread from one country to another. Sick factory workers had to quarantine, all production became standstill, which resulted in ‘A Global Supply Chain Crisis.’ The entire supply chain collapses when there is a crisis in several points of it! This is exactly what happened in mid-2020, going on to 2021 – high demands but the supplies stopped pouring in.

As 90 percent of the global trade takes place through sea, this spike in demand first hit the shipping industry. The rise in demand led to the rise in the cost of shipping. The shipping price rose 85.5% year on year. Presently it faced more inconveniences with the higher raw material costs, long delays at ports. There is a huge shortage of shipping containers, as well, which broke the whole supply chain.This quasi-regulated price policy is one of the main reasons behind all the distresses. Unless it is taken care of immediately, there are darker days ahead for the Chinese as well as the global economy. In 2020 when world was in need of masks and PPE kits, the Chinese factories were closed due to coronavirus pandemic. Now, when the world needs other supplies, Chinese factories are closing again. This time due to electricity shortage. A growing power supply outage in China is affecting the global supply chain to a great extent recently. The local administrative decisions for power-cut to curb missing targets on energy emission are impacting the global economy on a large scale. Estimated 44 % of China’s industrial activities are being affected by power cuts. The world’s factory has stopped working for the 2nd time in two years. As presently India prepares for Diwali, many parents are unable to provide toys to their children of their choice. America won’t have enough Christmas tree this December. The UK stores have already notified customers about their limited stocks with bare minimum discounts. The supply chain is collapsing. Over reliance on any country is not a good idea. This supply issue is a wakeup call for each country to be more independent. Standing at the juncture when the post-pandemic global economy is on its way to recovery – it’s time for us to rethink, re-evaluate global partnerships, to remake strategies. It’s time to broaden global supply chain horizons.
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