Impacts of social distancing measures on global supply chain configuration

Abstract

World Health Organisation has advised governments to prevent the spread of COVID-19 by introducing stringent social distancing measures (SDMs) in five levels, ranging from pandemic surveillance, stay-at-home recommendations, workplace closures, to national and international travel restrictions. These measures inevitably disrupt global business environment and supply chain configuration. Existing literature does not comprehensively analyze the five-level SDMs’ impacts on firms and supply chains. Thus, we established a mixed-integer programming model to integrate environment changes in lead time and cost for transportation and processing, market size, and the number of countries (NoC) imposing the SDMs. Sensitivity analysis is conducted to evaluate propagation impacts on global supply chains when the SDMs are imposed on firms in different echelons of supply chains. Results show that (i) supply chain losses and disruptions primarily depend on the NoC, followed by restricted transportation, market size, and processing limitations. (ii) When the SDMs, especially restrictions on transportation, are implemented in downstream echelons, the propagation impacts on supply chains and firms become more significant. (iii) Compared with elastic-demand supply chains, the fixed-demand one, e.g. food supply chain, suffers more significantly with the stringent SDMs and high holding costs. Finally, managerial implications are discussed from supply chains, firms, and policymakers.

KEYWORDS:

• COVID-19 pandemic
• Social distancing measures
• supply chain configuration
• global supply chain
• long-term pandemic disruptions

Data availability statement

Data sharing is not applicable to this article as no new data were created or analyzed in this study.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the 2019 Guangdong Special Support Talent Program – Innovation and Entrepreneurship Leading Team (China) [grant number 2019BT02S593], and 2018 Guangzhou Leading Innovation Team Program [grant number 201909010006].

Notes on contributors

Yiji Cai

Yiji Cai is a PhD candidate in the Department of Industrial and Manufacturing Systems Engineering, The University of Hong Kong. He received his B.Eng. and M.Sc degrees in the South China University of Technology (SCUT), Guangzhou, China, in 2016 and 2019, respectively. His current research interests are supply chain configuration, supply chain disruption like COVID-19 and trade conflicts, Internet of Things enabled decision making, and optimisation.

Shuyi Wang

Shuyi Wang received the B. Eng. Mgt from Beijing Jiaotong University, China, in 2012; MSc in Economics and Management from Chinese Academy of Agricultural Sciences, China, in 2015 and Industrial Engineering and Logistic Management from the University of Hong Kong, China, in 2016; and PhD in Industrial and Manufacturing Systems Engineering from the University of Hong Kong, China, in 2020. Since 2020, she is a post-doc fellow at the Department of Industrial and Manufacturing Systems Engineering at the University of Hong Kong. Her research interests are supply chain, sustainability, and operations strategy.

Zhiyuan Ouyang

Zhiyuan Ouyang is a PhD student in the Department of Industrial and Manufacturing Systems Engineering, The University of Hong Kong. He received his BSc degree in the University of Electronic Science and Technology of China (UESTC). His current research interests are e-commerce city logistics, reliability engineering, Internet of Things enabled decision making, modelling & optimisation, and approximate dynamic programming.

George Q. Huang

George Q. Huang is Chair Professor and Head of Department in the Department of Industrial and Manufacturing Systems Engineering, The University of Hong Kong. He gained his BEng and PhD in Mechanical Engineering from Southeast University (China) and Cardiff University (UK), respectively. He has conducted research projects in the field of Physical Internet (Internet of Things) for Manufacturing and Logistics with substantial government and industrial grants. He has published extensively including over two hundred refereed journal papers in addition to over 200 conference papers and ten monographs, edited reference books and conference proceedings. His research works have been widely cited in the relevant field. He serves as associate editors and editorial members for several international journals. He is a Chartered Engineer (CEng), a fellow of ASME, HKIE, IET and CILT and a member of IIE.