NEVER BEFORE HAS A PANDEMIC AFFECTED economies and collapsed businesses so badly as Covid-19. There are several channels through which the outbreak has affected various parts of the economy, and the disruption of supply chains is the major one. Unemployment is on the rise, along with a slowdown in the manufacturing and services industries. Workers are back at their home in faraway places, thereby leaving the coming harvest in uncertainty. Lack of orders may eventually lead to massive trade contraction. Besides, disrupted air travel, collapse of the tourism industry, contraction of outdoor entertainment industries, rise in bankruptcy and NPAs, even though these are short-term effects, these shocks can spill over to other sectors and economies via trade and production linkages.
For the Indian manufacturing sector, COVID-19 crisis presents a watershed moment. As conversations around local production gain steam with the call for “Atamanirbhar Bharat” (a self-sufficient India), companies are looking to ‘think global, act local’ in a bid to push for resilient supply chains and sustainable businesses. As social distancing becomes a norm, the companies will need to reconsider raw materials sourcing, supply chain optimisation, floor management strategy, manufacturing cycles, transportation of raw, part, finished goods along with workforce welfare.
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