Managing the Coronavirus Risk to the Supply Chain


COVID-19 Supply Infrastructure

Timeline of Coronavirus
According to data from the Chinese government, “patient zero” has been identified from the first confirmed case of the coronavirus (COVID-19) on November 17th, 2019. Patient zero did not start displaying symptoms until December 8th. It wasn’t until then that the Chinese government realized that a new virus had begun in the history of humanity.
On December 31st, 2019, China notified the World Health Organization (WHO) of “dozens of pneumonia cases of unknown origin.”
On March 11th, 2020, the WHO declared that the coronavirus (COVID-19) is a pandemic. On that date, there were more than 118,000 cases in 114 countries and over 4,200 deaths as a result of COVID-19.
At the time of writing this blog (late March 2020), there are now over 565,000 cases in 199 countries and territories and over 25,000 deaths, with the United States of America presently being deemed an epicenter.


How Coronavirus Impacts the Supply Chain
As nobody could have predicted the fast spread of COVID-19 as mentioned above, it is equally unpredictable as to the exact impact across the supply chain. The above statistics cited are to illustrate the reality of the swiftness of the spread of the disease. These statistics reveal how dramatically this virus can spread and, in turn, affect the supply chain for products and manufacturing.
Some outcomes may affect the following:

  • Labor
    • Decreased staff due to stay at home guidelines or sickness.
  • Materials
    • Shortages of supplies coming from hubs of impacted geographical areas.
  • Logistics
    • Supply networks may have limitations making alternative routes and means of transportation difficult.
  • Consumers
    • Consumers may be uneasy in their purchase habits because of fear of potential exposure to COVID-19 in public places.
  • Sourcing
    • Restricted travel limits the ability to transact business as usual.

With all the possible effects on the supply chain, there are things we can do about it.
The main impact of a pandemic to the supply chain is the lack of staff, change in public behavior, and decreased productivity. Warehouse and facility employers should take steps now to monitor and prepare for the impact on their supply chain.
The safety and health of your employees should be your highest priority. Understand that your employees most likely have concerns related to the risks to them and their families. Communicate often and clearly with your employees to reassure them that you have their best interest at heart.


Plan for Supply Chain Disruption
If you haven’t already, now is the time for your company to set up a system to monitor your supply chain distribution and develop a response team to ensure that your inventory not impacted by contaminated global areas and hubs.


Supply Chain Measures Present and Future

  • Supply chain mapping. Determine the origin of supply of essential components in your inventory, including every process and shipment involved. Have an extensive list of relevant organizations with accurate contact information. Your list should include the following:
    • Emergency Operations Centers
    • National and local governments
    • Multi-national organizations, for example, the World Health Organization, WHO)
    • Private sector organizations, business, and universities
    • Military
    • Ministries involved in public health emergencies
  • Evaluate the risk to your supply chain. Manufacturing companies should engage with all their suppliers from all tiers, to monitor distribution times and inventory levels.
  • Identify alternate supply chain sources with diversified chains, have multiple options.
  • Establish a plan for critical suppliers when a disruption occurs in any part of the supply chain.
  • Keep relationships healthy with all your suppliers and potential suppliers.
  • Optimize manufacturing and delivery capacity.
  • Ensure employee health and safety by communicating with them about infection risks and options to ensure their good health.
  • Work hand in hand with sales and operations to assess accurate demand for a product
  • Have an actual inventory count.
  • Prioritize which supplies are needed most during this pandemic.
  • Bring in more supplies than you would in ordinary circumstances. Not in the sense of hoarding but the spirit of practicality and efficiency.
  • Accelerate customs clearance. Ensure that the customs process runs efficiently. Submit commercial invoices, packing lists, certificates of origin, and proof of preference digitally and concisely.
  • Be prepared to act quickly if an inspection occurs.
  • Have a contingency plan for quickly evolving circumstances and the unexpected.
  • Balance the amount of product available during the time of the supply-chain disruption with the amount of supply that consumers desire to purchase. Keep in mind that if people are under stay at home orders, there are apparent products that they will require and products that just won’t be a high priority necessity at this time of global crisis.
  • Be reassured, remain calm, continually understanding that significant uncertainty encompasses supply and demand, especially now.
  • Be prepared for potential merchandise and manufacturing shortages.
The coronavirus pandemic has emphasized the importance of having an operational supply-chain risk management plan very clear. Companies have had to contend with supply-chain interruptions in the past. The coronavirus is exceptionally risky due to the nature of the source of the supply chain disruption.

Contact Parts Brite
The COVID-19 pandemic is unparalleled in its severity not only to medical professionals, governments, and all of humanity, but it has shaken our supply chain to its core.
After the COVID-19 pandemic dissipates, we will see companies that, in the end, sadly fail and companies that will rise above this crisis. One company is not necessarily better than another. Still, one thing is for sure; the more prepared your company is for the unforeseeable, the more likely your company will stand fast during hard times.
Planning transport, logistics, and storage in the event of an emergency, especially during the COVID-19 pandemic, is aided dramatically by future planning. At present, however, we do not have the luxury of planning ahead of time. The crisis is now, and the need is now.
At Parts Brite, we have an extensive network of resources available; you are not alone. Sometimes the solutions to our problems come from innovative sources. Allow us to help you think outside the box and to help you mitigate the changes that are happening during this time of worldwide crisis.
Let’s work together, side by side, to the other side of this global crisis. We will remain open. Please contact us if we can help.

 


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