The Impact of Coronavirus on Global Supply Chains and Actions to Take

Evaluating and mitigating the supplier and business impacts of pandemics

Since the first cases of a new coronavirus strain were detected in China back in December 2019, scientists and medical professionals have been racing to find a treatment and slow its spread.

Within weeks of the initial outbreak, the disease had infected thousands across China.

Today, countries all around the world are reporting infections.

Now called coronavirus disease 2019 (COVID-19), the impact of the disease has extended well beyond people’s health.

The outbreak is causing serious business, supply chain, and economic disruptions around the globe.

The Impact on supply chains

China’s economy is the second-largest in the world, which means China is critical for both the supply and the sales market.

On the sales side, Daimler, Volkswagen, BMW, and Audi make nearly 30% of their sales in China.

Chinese manufacturing plants and distribution centers are heavily relied upon by other countries worldwide and play a huge role in the production of parts for industries like consumer electronics, automobiles, medical devices, and telecom infrastructures, among many others.

Top 4 questions to raise for supply chain and procurement

This crisis offers another urgent reminder about the complexities and criticality of supply chain risk management. Smart organizations are stepping back to consider how they can build more resilient supply chains before the next crisis hits.

There are four urgent questions and considerations for procurement and supply chain teams:

1. What happened?
2. Which suppliers are down?
3. Which parts and products are affected?
4. Which customers are affected?