This rapid evidence review looks at the impact on supply chains of past crises and disruption. The aim is to help those responding to the current crisis to understand the medium- to long-term impact of some of these events on their business’s supply chains, and what role local authorities might have in recovery.
The Covid-19 pandemic and resulting economic crisis will hurt business eco-systems and put many firms out of business. Supply chain disruptions will play a major role in propagating the shock. An Office for National Statistics survey from March indicated that more than half of the firms that export or import products were already reporting supply chain disruptions.
A rapid review of the literature on the supply chain effects of major shocks and natural disasters (see the annex in the document below) suggests the following things to consider:
- Government may be able to help firms switch to alternative international suppliers and identify new customers by providing information, helping manage risks or providing credit guarantees. See our toolkits on export promotion agencies and export credit agencies.
- Limited information on local supply chains and the linkages between firms is likely to limit the scope for effectively targeting supply chain interventions (see the annex in the document below).
- It may be more feasible to identify particularly influential sectors or firms and intervene to provide direct support. Our major shocks toolkit considers the relevant evidence on policy responses. We will publish an updated briefing on this subject shortly.
- In the recovery stage, policy may want to encourage and assist firms to develop supply chains that are more resilient to disruptions and unexpected events. Existing business advice services may need help in developing appropriate guidance.
The document available to download below includes a Case Study on supply chain mapping.