Coronavirus Outbreak Breaks Supply Chains!

coronavirus outbreak breaks supply chains
coronavirus outbreak breaks supply chains

With the coronavirus outbreak, we have clearly seen how the bullwhip (demand exaggeration) effect occurs in the supply chains. Some products have become invisible, market shelves are empty and their prices have doubled. Production factories stopped due to part supply problems. States took additional measures to protect producers. On the other hand, there have been explosions in e-commerce. Take-out services have increased incredibly.

Physical distance has become important. Temporary health supply chains had to be established quickly. TIR transits stopped at the borders and TIR tails formed. Vehicle drivers started to apply a 14-day quarantine period. In RO-RO transportation, drivers could not be transported by plane and their stay in the European Union was shortened. The already existing driver shortage has been folded. Due to the constraints in road transport, freight has shifted to maritime and rail transport. There was a significant increase in demand. Due to the fact that the import containers could not be emptied on time in the seaway, when the need for empty containers increased in the export ports, the prices increased with the condition of cleaner fuel increased. Urgent orders were registered for air transport. However, as a result of canceling the flights of passenger aircraft, the load capacity decreased radically and reservations were started to be given weeks later. Expedition times have increased as a result of wagon disinfection operations at the railway border crossings. As a result, have supply chains been broken? Yes. The bullwhip effect in supply chains can only be prevented by synchronizing the supply chains. Fast and accurate information flow is the most basic issue. As the World Health Organization says: "test, test, test". Supply chain parties should plan ahead for the rapid flow of information and acting together for the normalization of business. Single-center solutions are not sufficient.

The process we are in has shown us once again the importance of logistics. We have seen why logistic functions are important in providing sustainable services both in terms of sustainability of the supply chain in health and in meeting the nutritional, hygienic, etc. needs of people. As well as the curfew, the basic needs of those who cannot go out must be met.

Supply chain cost is the sum of purchasing, production and logistics costs. Our conclusions from recent events show that we need to build more resilient supply chains and distinguish between disaster and post-disaster measures. In times of epidemic disaster, we need to find contactless foreign trade methods. At this point, infrastructure investments that will increase foreign trade by rail are important. kazanis working. It is clear that driver change at the border, container change (full-full, full-empty), semi-trailer change and rapid disinfection methods need to be developed further. For this, buffer zones must be created. Solutions for determining alternative routes and border gates and commissioning them quickly when necessary should be considered. Different countries have different tolls on different routes. Appropriate routes can be created with temporary agreements to be made with these countries.

The 14-day quarantine period applied to the vehicle drivers at the border entry should be removed from the application as soon as possible and the entrance / exit of the Turkish and foreign vehicle drivers should be allowed with the test kits at the borders. Increases should be made regarding the duration of vehicle drivers' stay in EU countries. Driver visa applications should be evaluated as priority and new visa should be extended by extending the period. With the coordination of the relevant institutions, it should publish tolerances that will be applied during working and rest periods, which will not affect the safety negatively, and time extension should be made according to the need. In order to simplify the business processes of marine export containers, the application of Verified Gross Weight (VGM) weighing should be interrupted, and ship agencies should request a letter of commitment from the sending companies. The driver / load system should be reconsidered and the tachograph supply of drivers and companies should be simplified and accelerated. Planning should be made for the provision of new drivers to work in international transportation (training, examination, certification), and the internet availability of some SRC and ADR training and exams should be evaluated.

Shift work at civil servants prolongs business processes. Instead, the process should be accelerated by ensuring the efficient use of paperless processing processes and measures should be taken to prevent job loss at every stage. In the package announced, there is no special support for the logistics sector, which is highly affected by the outbreak, except that the VAT declaration payments are delayed for 6 months. This support has already been given to 16 sectors. In this period, the SCT in fuel, which is an important cost item for logistics, should be removed and the service should be provided under more favorable conditions.

As a medium-term step, our main transportation corridors connecting our main international corridors covering our country and the logistics centers / villages to be established on these corridors should be determined in order to secure the flow of goods and reduce risks.

There are many companies in our country within the scope of global supply chains. Countries in the West do not want to produce some products in their own country. Turkey is growing with the export-oriented development model. However, we should also consider the fact that we are dependent on raw materials. Therefore, we should define the problems we are experiencing in the process of obtaining these raw materials very well and focus on the solution points here. Some products are not produced in Turkey. Therefore, we have to be in global supply chains all the time.
The important thing is to calculate all the risks and take the necessary measures. We need to perform risk management systematically and continuously proactively in terms of supply chain and logistics and strengthen our crisis management system in the short term. So we have to find ways to economically switch from the single-center supply model to the multi-center supply model. We must produce strategic products in our country.

As a result, the importance of excessive options and agility in supply chains once again emerged. It is understood that the options should be determined beforehand in both logistics processes and production, and the developments should be monitored dynamically and the most appropriate one should be used according to the conditions.

Professor Dr. Mehmet TANYAŞ
President of Logistics Association (LODER)

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