Coronavirus and Supply Chain Management

Everything You Need to Know about the Coronavirus and Supply Chain Management

The novel coronavirus (COVID-19) impact is stretching across international borders rapidly. According to data from John Hopkins CSSE Coronavirus COVID-19 Global Cases map, there are over 1,970,225 confirmed coronavirus cases and more than 124,544 deaths worldwide (and counting), as of April 7th, 2020. This rare phenomenon is causing a high demand for essential supplies and products, which is causing supply chains to face various adverse implications, including revenue loss and shipping delays. Thus, it’s crucial for warehouse and supply chain managers to prepare for and prevent the impacts of the coronavirus on their business and for the safety of their teams. Here are a few crucial factors to consider:

Know the Basics About Coronavirus (COVID-19) 

According to the World Health Organization, coronavirus disease (COVID-19) is a respiratory disease caused by the SARS-COVID-2 coronavirus. Scientists believe COVID-19 originated from bats and links it to wet markets in Wuhan, China, where scientists first discovered this novel virus back in December 2019. Some common symptoms of COVID-19 include fever, shortness of breath, and a dry cough. But the disease can also cause more severe issues, including pneumonia and death.

Confirmed cases continue to grow as more people receive testing. Governments are implementing curfews, advising individuals to practice social distancing and stock up on supplies, and encouraging businesses to operate at a reduced capacity to help contain the spread of disease. With these measures in place, the future impact on supply chains may include reduced productivity, freight price increases, and labor and revenue loss as workers get sick, demand rises for essential products creating demand variability that small warehouses can’t absorb, and warehouses in quarantined areas become unavailable or operate at reduced capacities. 

Prevent and Prepare

As the coronavirus pandemic continues to spread, supply chain managers should take steps to prevent and prepare for the impact COVID-19 will have on their supply chain. Here are a few tips to apply:

  • Develop a Business Continuity Plan. Business continuity plans should include a communication plan that demonstrates how the warehouse will effectively, transparently, and positively comfort and educate their employees and customers. For example, the company should create an updated newsletter that acknowledges the pandemic, thanks their workers and customers for their continued support, and communicates what customers and employees can expect, such as shipping delays or tips for whom employees can contact should they become ill with the coronavirus. 
  • Educate Teams About the Risk of Single-Sourcing. Single-sourcing is a weak sourcing strategy that can adversely impact a supply chain. Manufacturers in the high tech, semiconductors, and consumer electronics industry depended on 3,238 facilities located in China’s quarantined areas compared to 13 facilities located in South Korea’s quarantined area during the COVID-19 outbreak, putting their supply chains at risk for losing access to the supplies and parts they needed. That’s why supply chain managers must educate their staff about the risk of relying on a single supplier.
  • Educate Employees on How to Prevent Spreading the Virus. Since COVID-19 is easy to spread, managers should educate shipping coordinators and other warehouse workers to wash their hands for at least 20 seconds, cough into their elbow or a tissue paper (and then throw it away), opt for elbow taps instead of handshakes and practice social distancing by having non-essential workers to work remotely. 
  • Implement Risk Management Principles. Supply chain managers must prioritize the resilience of their supply chain by implementing risk management principles based on the risk of supply disruption and revenue impact. For example, warehouses that face a high revenue impact with the loss of a supplier and a high risk of supply disruption should know the locations of both direct and indirect suppliers and where they source raw materials and build and store their parts. Supply chain managers should also consider redesigning their supply chain management strategies to include local supply sources to diversify their supply chain.
  • Use Tools to Automate Processes. Shipping software and features, such as ShipWorks’ intelligent order routing, help companies quickly identify the nearest warehouses to route orders to automatically. Supply chain managers can also leverage ShipWorks’ rules and automation tools to automate any updates in tracking so they can give updates on deliveries. Moreover, shipping managers can quickly search for the best rate and shipping service to use by using features, such as the ShipWorks Best Rate Tool. 

Final Thoughts

The risks that the new coronavirus poses to supply chains are far-reaching. But supply chain managers can use the prevention and preparation tips mentioned here to help mitigate the adverse impacts of this global pandemic, such as implementing risk management principles and leveraging software tools such as ShipWorks. Contact ShipWorks to discover more about leveraging shipping software and automation tools to help reduce the impact of coronavirus on the supply chain.