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Thought Leadership
management and workers, business systems and planet. Talk of a situation where demand out-strips
short-term strategies, and supply chain operations supply and you have a perfect recipe in the making,
to quickly adapt to the new game and make the and it is called gold. Gold certainly emerged from
sudden and necessary shifts determined who were the COVID-19 crisis as a winner and will be for the
the winners and who were the losers. Ultimately, decade to come.
the business winners during the COVID-19 crisis Multinational CEOs also discovered that supply
were simply those who adapted and changed chain partnerships and collaboration mattered
according to the new global rules of the game the more than they might have realised during
fastest. these times of crisis. One of my close friends,
Supply chain directors and CEOs of a CEO of one of the world’s leading diamond
multinationals with a global footprint soon companies, was faced with a twin-pronged
discovered that the practical day-to-day realities supply chain challenge: real upstream diamond
of globalised supply chains do matter and cannot supply challenges on the one side, and then
be taken for granted. Integration and mixing and countless stores which closed down in Europe
matching demand with supply became harder to and other parts of the world on the end-customer
manage, especially for gold coin and bar dealers side. A ‘double-whammy’ which required smart
who simply ran out of stock overnight, as mine manoeuvring and management on both ends of
after mine was closed in South Africa and across the supply chain simultaneously – which stretches
the globe. The journey of gold from the mine the supply chain skills and dexterity of even
to the vault became a complex labyrinth – and the smartest and most skilled of supply chain
somewhere between the mine and the end- managers and CEOs.
customer, gold got lost in the maze of movements. Although traditionally many diamond buyers
The ripple effect of supply was felt right across like to do so in-store, they noticed that due
the gold supply chain from mining to production, to global COVID-19 travel restrictions, online
to slag supply of gold bars ready for refining, to spending on jewellery from reputable suppliers
transport and delivery of finished goods bars and in particular actually increased. So whilst in-store
coins from global mints to downstream dealers sales shrank, online sales flourished. The realities
and traders, to out-of-stock situations for end- of matching the online demand with steady
customers. Those ‘out-of-stock’ online postings supplies from the diamond mine accentuated the
on countless websites across the globe were now complex diamond domino effect and also created
starting to impact the end-customer. And the a temporary bullwhip, making the concertina
demand dilemma made gold skyrocket towards effect of significant supply chain vibrations harder
$2,000 per ounce, up from $1,500 an ounce at to manage – as online orders pulled the whole
the start of 2020. The major precious metals supply chain, creating vacillations and spikes and
shift in gold, as smart investors moved to gold troughs that were not easy to manage. All supply
as a safe haven during a crisis, accentuated just chains, from farms to factories, from grocery
how little gold supply there really is in the world stores to luxury stores, from hospitals to airlines,
from a supply chain point of view – only four were greatly impacted by the crisis, and had to
Olympic swimming pools of gold held in total by make quick adjustments just to survive and stay
all individual investors combined with sovereign profitable. Some were winners, and some were
wealth and federal reserve funds across the whole losers. •
6 October/November 2020 | Logistics News
