Although the coronavirus outbreak has slowed down the global supply-chain for industries across the spectrum, the need of the hour is to not only have a diverse portfolio of products but also a diverse portfolio of factories so that such unpredictable situations can be tackled in an efficient way in the future, a top HP Inc executive said on Thursday.
A global recession is likely if coronavirus becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in Italy and Korea, Moody's Analytics said this week.
"We at HP Inc have a good plan to deal with the current situation which is very dynamic. That's why it is important to have different portfolios. If you have a portfolio of products, you must also have a portfolio of factories. We are not dependent on one product and one factory," Vinay Awasthi, Managing Director, HP Inc., India, Bangladesh and Sri Lanka, told IANS.
According to him, traditional supply chain models will slowly pave the way for more flexible mechanisms so that inventories remain at their optimum level. "I think adjustments will happen to the global supply chains. The adjustments are already happening because of the global trade war between US and China. In the future, it's not just going to be one factory that will create one type of product and will supply all over the world," Awasthi emphasised.
Global management consulting firm Kearney, in its report titled "Coronavirus and the impact on global supply chains," said last week that the coronavirus outbreak and its impact on the economy has ringed the bell to immediately rethink existing supply chain scenario as established strategies only work when they are not disrupted.
The report said that to tackle such a situation in the future, first step is to develop visibility to your entire supply chain — primary, secondary, and even tertiary players and steps.
Although the coronavirus outbreak has slowed down the global supply-chain for industries across the spectrum, the need of the hour is to not only have a diverse portfolio of products but also a diverse portfolio of factories so that such unpredictable situations can be tackled in an efficient way in the future, a top HP Inc executive. Wikimedia Commons
"Next, recognise that events like the coronavirus outbreak are going to happen again and again – and determine what plans work best to mitigate the damage," the report added.
According to Awasthi, because of the coronavirus situation, people are willing to just advance the piece on flexible supply-chain delivery models.
"We have factories in China but we also have factories at multiple places elsewhere so we are ramping up production at those factories. Going flexible is complex as every country has different tariff structure but that is the name of the game and the future," he added. (IANS)