COVID-19 and its Butterfly Effect on Supply Chains and the World Economy

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Heba
Business Consultant, United Arab Emirates

COVID-19 and its Butterfly Effect on Supply Chains and the World Economy

🔥NEW In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. In simple wording, when applied to business, the butterfly effect means that small events sometimes yield large consequences. Compare also Black Swans.

China, the biggest factory on earth, is confronted with the current outbreak of the deadly nCOV found in Wuhan. And the world is witnessing a global decline in sales, stock markets, oil prices and a well-noticed shortage in supply chains and aviation activities that have a wide impact on the trade exchange across the globe.
COVID-19 exposed a weak link in the global drug supply, automotive manufacturing, and other sectors.

Being global has become the objective and goal of a lot of businesses. But the question now is: how can we strengthen the resilience of our supply chains while maintaining the value and cost chains intact?

Modern Portfolio Theory stands as a suggestion for a solution in the future for such an epidemic; though it is a suggested solution for VCs when investing in new capitals.
Nonetheless, the essence of the theory reminds me of my grandma's idiom: "Don't put all your eggs in one basket".
Diversification and not counting on one supplier/source should balance the risk and maximize the return of the business decisions within value supply chains. See also Kraljic Purchasing Matrix

⇨ What other mechanisms can be put in place to avoid or mitigate such supply chain risks and consequences in the future?

  Nita
CEO, United States
 

Corona Impact

In my opinion this comes at a particularly straine (...)

  Anonymous
 

Accumulation of Problems in China

Corona also comes at an already strained time for (...)

  Manoj Rambajan (MBA)
Mauritius
 

Mitigating the Effects of the Coronavirus (Covid-19)

The Coronavirus (Covid-19) and its butterfly effec (...)

  Prof. Arup Barman
Professor, India
 

COVID-19, Chaos to Cha-ordic and India

The Indian philosophy of handling chaos is differe (...)

  ELIJAH MUSILI
Entrepreneur, Kenya
 

Fivver Freelancer

Think it all comes down to how efficient you can s (...)

  sebas
Student (University), Netherlands
 

The Death of One, is the Bread of Another

This supply crisis creates opportunities for local (...)

  Heba
Business Consultant, United Arab Emirates
 

Creating Opportunities for Local Suppliers

@Sebas: Imdeed, I personally witnessed local mark (...)

  Heba
Business Consultant, United Arab Emirates
 

Revisit your Supply Chainís Design

There is little to do in a reactive mode to the su (...)

  Heba
Business Consultant, United Arab Emirates
 

How to Manage the Impact of Coronavirus on Supply Chains (Short and Long Term)

Five things buyers must do in the long term: C (...)

  Nita
CEO, United States
 

'I'll Trade You'

@Heba: Heba, I would agree with you. Our Presiden (...)

  Prof. Arup Barman
Professor, India
 

Deglobalization through COVID-19

We got the tastes and distastes of globalization s (...)

  Prof. Arup Barman
Professor, India
 

Post Covid-Reverse Thinking

For many countries, societies, businessman, indivi (...)

  Jaap de Jonge
Editor, Netherlands
 

Corona is not About Butterflies But About Grasshoppers

@Prof. Arup Barman: We humans have been behaving o (...)

  Nita
CEO, United States
 

Why CAN'T we Stay Home?

@Prof. Arup Barman: So many companies are still f (...)

  Prof. Arup Barman
Professor, India
 

We Can Stay at Home- if Situation Compells

@Nita: I understand your point. You are prone to s (...)

  Prof. Arup Barman
Professor, India
 

The Consumption by Prosumption

@Jaap de Jonge: Mr Jaap! I found it interesting to (...)

  Maurice Hogarth
Consultant, United Kingdom
 

Pandemic to Prevent Prosumption

@Prof. Arup Barman: If difficulties are really opp (...)

  srinivas
Lecturer, India
 

Implementation of Technology to Mitigate Risks in Supply Chain

It is a good time to put the new technologies to t (...)

  Prof. Arup Barman
Professor, India
 

Global Pandemic - can we Draw a Full Stop?

@Maurice Hogarth: Yes, human must put the full st (...)

  Gary Wong
Consultant, Canada
 

COVID-19 is NOT a Black Swan. It's a Black Elephant

COVID-19 is a black elephant. A black elephant is (...)

  Prof. Arup Barman
Professor, India
 

Heinous Intention-Black Elephant Rearing and Human Sufferings

One should not rear an elephant so that the elepha (...)

  Maurice Hogarth
Consultant, United Kingdom
 

The Survival of Supply

What can we do to avoid or mitigate disruptions to (...)

  Jaap de Jonge
Editor, Netherlands
 

Recommendations for Post-Pandemic Supply Chains

If you are interested to learn more about how comp (...)

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