As COVID-19 spread from China to Europe to the U.S. and elsewhere, supply chains that for decades had operated successfully on “lean logistics” – which prized low-cost efficiency – suddenly seized up as parts made in Europe, for instance, couldn’t get to China for final assembly before being shipped to the United States for retail sale.
Why? “Well … to be honest, we were not prepared to change quickly enough to deal with COVID,” said Ronald Leibman, a partner leading the transportation, logistics and supply chain management practice at law firm McCarter & English in New Jersey.
Lean logistics created supply chains that may have been cost-conscious and hyper-efficient, but they were not nimble, he said.
“No one listened to the warnings from the academics and pundits [after earlier global health scares and natural disasters] saying ‘you’re not ready guys,’” he added.
“COVID was the big wake-up call.”