Abstract

The blockage of the Suez Canal caused by megaship Ever Given captured headlines for six days in March 2021. After the ship was freed and the blockage cleared, there were speculations regarding its impact on the global economy and the changes it could bring about in the global supply chain industry. The total trade loss was estimated at US$ 54 billion. But considering the fact that it had an impact on commodity prices across the world, the loss was expected to run into several billions. The impact of the crisis was expected to last even after the incident had ended. Countries, companies, and industries around the world impacted by this crisis were in for tumultuous days ahead. According to Allianz, a Germany based insurer, global trade could be impacted to the tune of 0.2% to 0.4% per annum due to the blockage. The blockage also worsened the shipping container shortage in Asia. This further delayed the export of consumer goods, spoiled countless goods in transit, and also temporarily led to a global semiconductor shortage that affected countless manufacturing industries. Some analysts were of the opinion that the crisis created due to the blockage would also accelerate a shift in the global supply chain from just-in-time to just-in-case.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Evaluate risk mitigation strategies in global supply chains and develop a resilient supply chain
• Evaluate the advantages and disadvantages of Just in Time and Just in Case Inventory management
• Understand the sourcing decisions in a supply chain
• Evaluate the risks of outsourcing in a supply chain

Keywords

Suez Canal; Global Supply Chain; Just in Time; Just in Case; Crisis; Resilient Supply Chain, Sourcing Decision; Global Supply Chain Risks