Singapore: The covid-19 pandemic has caused significant disruptions to supply chains in the APEC region and has highlighted the need for governments to consider strategies for greater resilience, according to the latest APEC Regional Trends Analysis report launched on Thursday.
"Most of the concerns raised about supply chain resilience have been echoed by the business community, but more can be done to manage resilience at the policy level," said Dr Akhmad Bayhaqi, a senior analyst with the APEC Policy Support Unit, in a press release issued on Friday.
The APEC region has been producing close to 60 percent of global manufacturing value added (MVA) over the past two decades, spread mainly across four main hubs.
When covid-19 lockdowns affected these hubs, it led to severe supply chain disruptions.
In the first four months of 2020 alone, the APEC region saw a 6.3 percent decrease in exports and a 5.5 percent decrease in imports compared to 2019.
"Businesses’ attempts to reduce supply chain costs by focusing on lean manufacturing, offshoring and supplier consolidation seem to have increased overall global supply chain risk and reduced flexibility," said Satvinderjit Kaur Singh, a researcher with the APEC Policy Support Unit.
"This has led to calls for greater resilience in the aftermath of covid-19," Singh added.
However, improving resilience is not an easy or cost-free exercise, the report highlighted.
Global supply chains were formed based on the business linkages that would provide the most cost-efficient outcome, so that businesses can position themselves competitively in the global markets.
The recent disruptions have brought forward the difficult conundrum for businesses in choosing between efficiency and greater resiliency.
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