Coroanvirus’ Impact On The Supply Chain

Coroanvirus’ Impact On The Supply Chain


Management logistics of Industrial Container Cargo for Import Export business.

The impact of coronavirus on supply chains around the world may prove severe. However, currently, we are unsure of the seriousness.

It typically takes as much as 30 days for items from one area of the world to be delivered and shipped to another. Because of this, we will likely have a better feel for the situation — and the potential supply chain disruption — in the next 30 days.

This doesn’t mean companies should have a wait-and-see attitude, according to Michael Wilson, vice president of marketing and packaging at AFFLINK.

“There are steps manufacturers and distributors need to take to monitor their situation and prepare for the potential impact coronavirus may have on the different supply chains,” says Wilson.

These steps can be broken down into three categories

1. What to do now

Suppliers and distributors need to find out where the parts or products they purchase are manufactured, which can be more difficult than one would think. Many products made in China, for instance, are produced by different sub-manufacturers. If these sub-manufacturers are shut down, the supply chain can be at risk.

There may be legal ramifications if a product cannot be delivered to a customer on time or when needed. Accounting issues can also materialize, including late payments, delayed invoices, and credit memos needing to be issued. All need to be investigated to help determine what steps suppliers and distributors can take to protect themselves. 

2. What to do soon 

Manufacturers and distributors should check-in with suppliers and see if they are being impacted, and if so, how seriously. While they may not be experiencing any problems currently, distributors need to find out as soon as possible what the situation is. 

3. What to do this year

Many manufacturers and distributors do not have any form of risk management program in place, but they should.

“Because of coronavirus, climate change, even natural disasters such as floods and fires, a risk management program is needed,” says Wilson.  

“The goal of these programs is to establish alternative sources to help keep their businesses operating and goods flowing, should there be supply chain distributions.”

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