CC BY
29ECONOMIC SCIENCES
TRANSFORMATION OF LOGISTICS SYSTEMS IN THE CONTEXT OF THE COVID-19 PANDEMIC
Sizov P.
Postgraduate student, Ural State University of Economics, 620144, Russia, Yekaterinburg, 8 Marta str./Narodnaya Volya, 62/45
Abstract
The article deals with the actual problem of the impact of the global pandemic on the supply chain. The changes that were forced to form in the procurement and production activities are shown. The need to adapt the business to new conditions, as well as the need to introduce digital technologies in supply chain management, so that in the future supply chains will be adapted to such situations.
Keywords: Logistics systems; digital technologies during the pandemic; the impact of the pandemic on logistics;
The COVID-19 pandemic has changed business processes for many companies and people all over the world, having emphasized the need for ability to quickly response, adapt and create comprehensive crisis management mechanisms in situations of uncertainty. Since severe restrictions created many tough situations in the business environment and required immediate resolution in the early months of the pandemic, many companies are now setting off on moving to recovery and planning for a long-term perspective.
The overall impact of COVID-19 and associated contingency measures have yet to be fully identified and understood. It is clear, however, that companies have encountered significant disruptions in operations and production activities, which included everything starting from decline in deliveries to disruption of some logistics chains, changes in supplier performance, and hindrances in fulfilment of contractual obligations to customers.
The pandemic has unveiled the importance of investing in supply chain consistency to create sustainable long-term operations. In recent decades, supply chain optimization has been primarily viewed in terms of cost efficiency and business results. However, as 2020 has shown, future supply chains will have to factor stability and adaptability to new conditions or emergencies in calculations.
Coronavirus can have a significant impact on global food supply chains. And it is countries with high import ratio that will be inevitably affected most of all. It is noted that shortage of certain commodities may be suffered worldwide in the near future. The reason is that producers and suppliers are forced to change their operational modes due to the coronavirus pandemic and associated restrictions. Consumers will be affected by these changes as well. Consumer boom in some countries caused by the spread of coronavirus can lead to starvation in others. To avoid food shortage, governments have to strengthen social security mechanisms to maintain access to food and support national agriculture. [1]
As the global practice of 2020 has shown, few businesses were prepared to adapt to changes without significant losses. Companies that have not yet done so are suffering losses even today; however, in any case, they should prioritize their logistics systems and supply chain management in order to understand what changes or actions will be needed to mitigate future disruptions. According to the author, such analysis should include contractual obligations, reassessment of force majeure, tax and labour implications of changes, potential relocation costs for staff, active implementation of tools that ensure remote control without human involvement, digital technologies that ensure process transparency and rapid transformability, etc.
Besides, P.A. Esin in his paper World Market Development Scenario in the Context of the Coronavirus Crisis notes the following influence on the implementation of new technologies and change of supply chains during the pandemic period: "Microeconomic legacy. Crises, including epidemics, can spur the adoption of new technologies and business models. The SARS outbreak of 2003 is often credited with the adoption of online shopping among Chinese consumers, accelerating Alibaba's rise (a Chinese online commerce holding company)." [2]
According to the authors [6], to create effective supply chain management software, first of all, it is necessary to build information support for the network structure of supply chains. The task of building an information system arises for a specific object of research - an economic entity, a functional area, etc. At the first stage, the form of the network structure of the supply chains of the selected object is analyzed and determined. Thus, using the proposed logical scheme (Pic. 1) and a systematic approach for the analysis and formalization of information flows, it becomes possible to build information support for the network structure of supply chains and solve specific tasks for various logistics systems of the selected research objects [6].
General aim Develop an information support svsteni for the network structure of delivery'
chains
Aim 1 level
Aim 2 level
Aim 3 level
Determine the shape of the network structure for the chains of delivery
I
Determine the range of tasks solved by the information support system in supply chains in accordance with the structure of the selected object
Determine the range of tasks solved by the information support system in supply chains in accordance with the structure of the selected object
Aim 4 level Create the imitation of economical and math model for control the chains of studied object
' r
Aim 5 level The information system creating
r
Develop the method of creation and valuation of information support system delivery chains network structure
r
Make the approbation of suggested methodological approach of selected object
Pic 1. The scheme of building an information support system for the network structure of supply chains
There is no doubt that the shipping process is becoming complicated; that the control is being increased and delays at borders are being encountered; in some cases, there is no possibility to deliver goods according to the previously established routes at all. [3][4][5]
It is not that easy to fundamentally change existing supply chains as it may seem, since in order to create a reliable and safe system,
it will be necessary to balance cost efficiency requirements along with disruptions caused by emergencies (in particular, COVID-19 pandemic). However, new processes that are being designed and launched in logistics systems can stabilize the current situation in global markets and reduce the effect of the current panic. In the near future, companies are expected to start looking for a more diversified supplier base, while seeking to develop a flexible but cost-effective supply chain, implement digital transformation where possible, adopt cutting-edge technology in a feasible and human- and environmentally-friendly manner.
References
1. E. A. Litvinov, Yu. A. Savinov, E. V. Taranovskaya, N. Y. Bulygina. The impact of corona-virus on global supply chains. Russian Foreign Economic Bulletin, pp. 89-104, No. 6, 2020
2. P. A. Yesin. The scenario of the development of the world market in the conditions of the corona-virus crisis. Izvestiya vuzov. MON, 2020, T 28, No. 2.
3. Yu. V. Savushkina. The railway industry in the context of COVID-19. Innovations and Investments, No. 6, 2020, pp. 291-293.
4. Electronic resource: https://www.tks.ru/logis-tics/2020/05/06/0003, 2020.
5. V. I. Pleshchenko. Procurement activities during and after the coronavirus epidemic: how to work further? Business Strategies, Volume 8, No. 5, 2020
6. Sizov P. L., Khmelnitskaya Z. B. Problems of building information support for the network structure of supply chains. Economics and Entrepreneurship, No. 8 (109), 2019, pp. 1159-1163.
