It all began in late December 2019 when the World Health Organization was informed of several cases of severe pneumonia in Wuhan, China. The strain was subsequently named Coronavirus (COVID-19), and since then, it has spread like wildfire across the world. What was once thought to only be an issue in China is now a global pandemic, with thousands infected and a huge majority of businesses forced to close down their offices or suspend operations indefinitely. It is now clear that we have never witnessed anything quite like Coronavirus before, and people, businesses, and supply chains may not be ready for what’s to come.
Coronavirus’s impact on global supply chain operations
One area that is being hit particularly hard by the Coronavirus outbreak is supply chain and logistics, especially when it comes to the territory of travel bans and restrictions. Now more than ever, supply chain leaders must be proactive in trying to get ahead of what could be catastrophic losses.
Many analysts predict that the worst is still yet to come, and in just a few weeks, thousands of businesses will be forced to suspend operations in the U.S., Europe, and Asia. According to the Harvard Business Review, “the most vulnerable companies are those which rely heavily or solely on factories in China for parts and materials. The activity of Chinese manufacturing plants has fallen in the past month and is expected to remain depressed for months.”
And according to AXIOS, U.S. companies are particularly struggling with the lack of capacity in China, with over 44% of those interviewed revealing that they had no backup plan in the event of manufacturing disruptions from China, and between 50-60% experiencing delays or suffering from a lack of information from their Chinese suppliers. These supply chain disruptions are unprecedented, and as the issues spread from beyond Asia to the rest of the world, the extent of the repercussions are yet to be seen.
Why is Coronavirus hitting so much harder than SARS?
Although initially compared to the SARS outbreak, Coronavirus seems to be hitting much harder and much more quickly than the 2003 epidemic. One of the biggest reasons for this is China’s current status at the core of the global economy. More industries are dependent on China than ever before, especially when compared to how the global picture looked in 2003. Any issues in China are no longer easily contained, as illustrated by the current extent of the Coronavirus pandemic. And with how interconnected all supply chains have become, disruptions in one part of the supply chain quickly trickle through and lead to further disruptions, delays, and inefficiencies.
Why supply chains are particularly vulnerable
Thanks to globalization, modern-day supply chains are incredibly complex, typically spanning several international borders. Because of this, travel bans or quarantines are a real threat, as materials or goods cannot be routed through affected areas. This leads to shortages which further fuels global panic.
Additionally, most U.S. companies have switched to having their employees work remotely until the threat of Coronavirus has passed, further limiting how efficiently companies can perform. Not to mention that any workers that are ill are obviously without the ability to work. And last but not least, consumers are becoming wary of going into crowded public areas due to the fear of contracting the virus, leaving retail stores abandoned and people turning to online sales more than ever, further putting stress on supply chains that were not ready for this huge spike in demand.
It is clear that the Coronavirus is limiting the ability for businesses to perform optimally, leaving supply chains extremely vulnerable and the public incredibly worried.
How to strengthen your supply chain during these times of uncertainty
One of the best ways to make sure that your supply chain is ready for anything that may come its way is by incorporating new and emerging technologies. Blockchain, for example, can increase visibility across the board, allowing supply chain managers to quickly pinpoint where there may be a shortage and appropriately allocate inventory to ensure that shelves aren’t bare, especially when it comes to essentials like food and pharmaceuticals. When people have access to what they need, there is less global hysteria, which can be invaluable in stressful times.
And in truth, no country, company, or individual person could have predicted the Coronavirus outbreak, or could ever truly know how to prepare for it. That said, it is clear that those working in critical industries must strengthen their supply chains to continue to navigate through these murky waters. For anyone working in these industries, we are waiving our initial costs and accelerating launch times so that we can all do our part in helping contain some of the devastation as best as we can. To learn more about how to take advantage of this offer, please contact us.