Strategies to Minimize the Impact of Coronavirus on Supply Chains
Manufacturers across the globe are struggling to address supply chain disruptions caused due to COVID-19 outbreak. Commonly called as coronavirus, is impacting supply chains in terms of parts, labor, and government restrictions. Quarantined workers and shortages of components have crimped the availability of goods from different manufacturing locations, primarily China. The severity of disruptions is […]
Manufacturers across the globe are struggling to address supply chain disruptions caused due to COVID-19 outbreak. Commonly called as coronavirus, is impacting supply chains in terms of parts, labor, and government restrictions. Quarantined workers and shortages of components have crimped the availability of goods from different manufacturing locations, primarily China. The severity of disruptions is expected to increase after the first quarter of this year. Lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move products for the majority of US businesses due to coronavirus impact on supply chains. The experts at SpendEdge have put forth some key points after evaluating the coronavirus impact on supply chains. Here they are:
1. Companies in the manufacturing sector could expect a delay of approximately three weeks for the supply of raw materials and products.
2. There could be disruptions in the supply chain of hardware required to run the business or third-party systems.
3. As the situation is expected to remain fluid due to lockdown in several regions, shipping and delivery could become a new choke point for some industries.
4. Not just Facebook and Apple products, the shutting down of global supply chains could lead to scarcity of other day-to-day essentials as suppliers face their own challenges in improving supply chain management operations.
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How Can Companies Prepare for the Future?
Advanced manufacturing units
Companies of today must focus on advanced manufacturing and things such as 3D printing and artificial intelligence rather than setting massive factories that build things at large scale and at low labor costs. Instead of making one city a manufacturing hub, the focus should be on smaller manufacturing hubs in different cities. Shortened supply chains will reduce coronavirus impact on supply chains and improve capability and innovation.
Wondering how companies in different categories are improving supply chain management and reducing coronavirus impact on supply chains? Contact us, to gain comprehensive insights.
Localized supply chains
If companies want to prepare themselves for the future, they need to create small and agile supply chains. They cannot afford to have a 30-day shipping time from China to the United States. Supply chains need to be nimble, not just to address unprecedented risks or pandemics but for innovation. It is really difficult for companies to be innovative onshore when they have advanced manufacturing engineering offshore.
Creating localized supply chains is crucial for companies to address unprecedented risks. Stay a step ahead by requesting a free demo of our procurement platform to gain exclusive insights into coronavirus impact on supply chains and devise effective strategies.
Companies should consider investing in a self-operated, proprietary supply chain and logistics network and create an internal task force to manage the crisis response. Deploying human and autonomous capacity to facilitate the delivery of crucial supplies and waiving fees for some suppliers could help companies resume their operations quickly. In devastating epidemic situations like this, improving in-house logistics networks could lead to greater profitability for companies.
To know more about coronavirus impact on supply chains and ways to improve logistics and supply chain management strategies, request more information from our analysts.