Five Strategies for Navigating China’s COVID-19 Supply Chain Crisis

Amid worsening COVID-19 outbreaks in China, logistics teams worldwide scramble to navigate new supply chain snarls. The end of China’s zero-Covid policy has triggered a dramatic surge in COVID-19 cases, sending labor shortages and factory shutdowns soaring. In the country’s three most important manufacturing centers, 60% of textile businesses have halted production, sparking potentially global repercussions.

Logistics teams continue to grapple with several challenges—including growing customer demand and increasingly ambitious C-suite objectives. They can react decisively to ever-evolving disruptions by implementing smart and flexible solutions. Here are five strategies for navigating the ripple effects of COVID-19 in China (and beyond):

Overcome supply chain hardships amid volatility

1. Keep anticipation inventory

In any unpredictable climate, preparation is essential. Today’s supply chain fiasco may  be China’s COVID-19 crisis, but tomorrow, it could be something else altogether. By stocking up on critical supplies, logistics teams can react flexibly to supply chain disruptions—whether they last a few weeks or several months. 

2. Diversify supplier networks

Supplier diversification is a proven risk management strategy. By building reliable partnerships with suppliers in different regions, companies can better maintain anticipation inventory, minimize delays, and quickly circumvent unanticipated shortages. 

One increasingly popular supplier alternative is Vietnam, an emerging manufacturing giant. This Southeast Asian nation—only a short distance from China—has captivated many foreign companies reliant on low-cost tech manufacturing, thanks to its strategic location, plentiful trade agreements, and relatively inexpensive workforce. By building a trustworthy supplier network, logistics teams can avoid the worst of COVID-19-related supply chain disruptions in China—all while boosting cost-efficiency and minimizing disruptions to existing supply chain workflows.

3. Adopt industry-leading technology

As companies worldwide continue to invest in automation, AI, and other smart technology, customer and C-suite expectations will only continue to rise. In today’s high-pressure climate, logistics teams can benefit from investing in the right technology and a strong implementation and maintenance partner. Doing so can provide end-to-end visibility into the entire supply chain—including suppliers, carrier partnerships, pricing, and shipping movements. The right technology can also sharpen demand forecasting, inventory management, and risk mitigation efforts. 

4. Tighten shipping contracts

To prepare for unexpected delays and setbacks, logistics teams must build secure, reliable partnerships. Consider stipulating specific shipment or delivery dates, or enforcing frequent carrier check-ins and transparent communication.

5. Reassess priorities

Focusing on priorities—whether a particular customer segment, predictable demand cycles, or crucial technology investments—is essential for long-term success. Though strategies vary by situation, all logistics teams can benefit from high-level planning. The Eisenhower Matrix, for example, is a popular prioritization method that helps teams categorize supply chain tasks based on urgency and time-sensitive objectives.  

Kickstart a new era of supply chain planning 

China’s COVID-19 crisis—as well as its attendant supply chain disruptions—haven’t shown any signs of letting up. Logistics teams continue to navigate an increasingly high-stakes environment—a growing challenge for both themselves and their partners. 

With the right tools and strategies, logistics teams can approach these hurdles with confidence. Partnering with CTSI-Global provides access to essential end-to-end logistics management solutions, including carrier selection, streamlined transportation management system (TMS) technology, freight claim assistance, and more. Equipped with the right solutions, logistics teams can build more predictable, flexible, and resilient supply chains—one strategic decision at a time.

Ready to build a strategic supply chain strategy? Contact us to learn more about our end-to-end and customized logistics management solutions.