The Positive Economic Effects of COVID-19

Despite the numerous catastrophes that have been a direct result of the COVID-19 pandemic, there potentially could be a positive impact in the management of supply chains. A large amount of the economic downfall we have experienced at the hands of this virus boils down to the basic focal point of supply economics. Normally, supply chain malfunctions go unfelt by consumers. However, with the shortages of masks, hand sanitizer, toilet paper, and some food, the impact of non optimized supply chains was felt by citizens nationwide. With supply chains internationally being disrupted from workers inability to contribute their integral positions, companies are now looking to utilize artificial intelligence and other forms of automation to streamline supply chains into a more efficient process. As companies move to digitize their supply chain procedures, we are able to get a glimpse into the future of supply economics and begin the process of establishing extremely stable supply chains that do not rely on circumstances to operate. An example of this is Walmart, who recently paired with a Carnegie Mellon born company Bossa Nova Robotics to automate the shelving and stocking process in their stores. The obvious downside of the shift from manual labor to automation is the replacement of jobs filled by human workers to that of robots. Furthermore, the automation of supply chains during this pandemic presents a possibly even larger issue of widening the gap between large and small businesses. Larger corporations who can afford the automation process will gain a sustained competitive advantage as smaller businesses will not be able to afford this implementation.

Another potential benefit that the current pandemic presents is the onshoring of American companies. Many companies have realized the need of diversifying their supply chain to ensure the movements of goods even if a specific production site is shut down. We can expect to see more and more companies bringing back manufacturing to the United States as offshoring becomes a riskier habit. Overall, throughout this crisis, COVID-19 has taken its toll on the economy. However, after this pandemic passes, our economy could possibly rebound even stronger as supply chains will be reinvented and more American companies will have their manufacturing take place back in the United States.

Keith Knutsson of Integrale Advisors commented that, “The pressure that COVID-19 has placed on our economy, specifically supply chains, might prove to benefit our markets in the long run.”

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