Lockdowns are killing supply chains
Updated: 2 days ago
It’s been frustrating helping business and political leaders understand the unplanned consequences of economic lockdowns. The most damaging of these is the disruptions of supply chains, which can affect manufacturers, distributors, and consumers for many months after lockdowns are lifted.
Politicians point to exemptions of critical industries as strategies to help people and the economy. These are at best short term stopgap measures. The numbers from leading economies validate what should have been self-evident all along. The US, Japan, and Britain for example all posted record GDP drops of 32.9%, 27.8%, and 20.4% respectively [i], [ii], [iii].
I crafted the video above to illustrate the broad interconnectedness of supply chains. It covers industrial manufacturing, finance, distribution, and consumer sales. It was intended to advertise OPR’s Recovery Framework and is proving useful in helping clients visualize the supply chains crisscrossing their operations. This is the first critical step in developing practical strategies to cope, survive, and thrive as a new economy rises.
[i] Jeff Cox, Second-quarter GDP plunged by worst-ever 32.9% amid virus-induced shutdown, July 30, 2020, MSNBC, https://www.cnbc.com/2020/07/30/us-gdp-q2-2020-first-reading.html [ii] Japan’s GDP falls by record 27.85 in Q2, August 17, 2020, CFO, https://www.cfo.com/global-business/2020/08/japans-gdp-falls-by-record-27-8-in-q2/ [iii] Richard Partington, UK GDP falls by record 20.4% in April as lockdown paralyses the economy, June 12, 2020, The Guardian, https://www.theguardian.com/business/2020/jun/12/britains-gdp-falls-204-in-april-as-economy-is-paralysed-by-lockdown