February 03, 2020

Business continues to brace for impact of coronavirus


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Business Continues To Brace For Impact Of Coronavirus.

Supply chain quarterly

Supply chain disruptions due to the coronavirus could last from three to six months, conditions similar to what businesses saw in the wake of 2009's swine flu outbreak, according to experts from supply chain software firm Resilinc. 

In a January 30 presentation, Resilinc CEO Bindiya Vakil said that 280 supplier sites near Wuhan, China, where the outbreak began, had been affected by the Chinese government's response to the crisis. The government had extended the Chinese New Year holiday to this past Sunday, February 2, to deal with the virus, leaving factories shuttered and employees home as transportation systems were shut down. Although markets reopened in China today, many businesses remained closed and millions of Chinese remained on lockdown; Resilinc said it looked like the government may extend the shutdown through February 11. 

As of this past weekend, the Chinese government had reported more than 17,000 cases and more than 360 deaths from the virus, which is an upper respiratory illness similar to the severe acute respiratory syndrome (SARS) virus that killed hundreds in 2003 and also originated in Asia.

To date, the shutdowns and related efforts to contain the coronavirus outbreak have delayed shipments and disrupted global supply chains. Vakil  said a clearer picture of the business impact will emerge when health organizations begin reporting recovery rates from the illness, but for now she said businesses should expect more supply chain snags ahead. To date, she said industries most affected by the disruptions include aerospace, automotive, general manufacturing, consumer goods, consumer electronics, food and beverage, life sciences, and industrial chemicals.

Resilinc tracks real-time data from more than 100,000 suppliers and as a result is recommending a host of precautionary steps for companies sourcing in the Wuhan region, which is in China's Hubei province and home to a range of manufacturing industries. Vakil said companies with primary and sub-tier suppliers in the region should plan for a range of scenarios, such as generating time horizons and reviewing inventory levels among those suppliers. Items hit hard in the pharmaceutical industry include hospital gowns, which are in short supply, for instance. She offered key steps businesses can take to prepare for the disruptions, including scenario planning, communicating with suppliers and subcontractors to ensure readiness, training employees on scenarios and next steps, and determining weak links in their supply chains.

Read the complete article from Victoria Kickham at Supply Chain Quarterly>>

Topics: supply chain risk management, SCRM Best Practices, supply chain resilience, supply chain risk, Supply Chain Impact, business continuity, coronavirus update