The coronavirus, also called COVID-19, has had a detrimental impact on global supply chains. The virus originated in Wuhan, one of the most populated cities in China. As one of China’s four central railway hubs, a virus outbreak in Wuhan quickly spread along the supply chain to the rest of the world, with outbreaks in 47 countries. While cases in China exceeded 50,000 before the government stopped regularly reporting numbers, there are also more than 400 documented cases in Italy and 800 in Japan, while South Korea reports the virus is spreading even faster than it has in China.
In the United States, there have been thousands of reported cases, driving significant worry that the virus will spread here as well. As such, the virus has far-reaching implications not only for global supply chains but domestic supply chains as well. Major retailers such as Apple have reported that a prolonged outbreak could interrupt its supply chain, while Amazon has expressed concern that it won’t be able to import enough inventory to meet its annual Prime Day obligations.
Mitigating the Supply Chain Risk of Coronavirus
Here are some things you can do right now to minimize the impact of a coronavirus impact on your supply chain.
Prioritize the Health of Your Workforce
Coronavirus is highly contagious, so it is in the best interest of your business for employees not to come to work sick. The incubation period of the diseases is between two days and two weeks, so it’s important that workers stay home when they feel under the weather and until they feel better. Encourage your employees to use sick time if they need it—especially if they are exhibiting flu-like symptoms.
Common symptoms associated with coronavirus include:
- Trouble breathing
If necessary, consider updating your company’s sick leave policy or design an emergency policy for employees with flu-like symptoms to encourage them to stay home and avoid infecting the rest of your workforce. You might also consider allowing employees to work remotely if their job functions allow.
Prepare for an Emergency Response
Consider how a coronavirus outbreak at your facility might impact your business. Here are some areas to consider:
- Have contingency plans in place to make sure that you can afford to shut down for a short period, or that you can at least continue to fulfill orders with a reduced workforce.
- Engage secondary suppliers in case facility closures in Asia or other parts of the world leave you without critical inventory. This is a good time to initiate relationships with local and domestic suppliers.
- Have a plan in place to quickly communicate any delays and relevant updates to your customers and any other stakeholders.
- Strengthen relationships with secondary carriers and alternate modes in case your primary carriers are impacted by an outbreak. This will ensure that your shipments keep moving even if your primary carriers can’t maintain their usual capacity.
- Make sure your finance and legal teams are up-to-date on any missed deadlines or other contract violations. While most customers should be understanding in the event of an emergency, it’s best to cover all your bases.
Address Inventory Management
As hubs around the world experience delays or shut down entirely in the face of the coronavirus threat, many exporters here in the United States are left holding more inventory than usual. Consider how a coronavirus outbreak may impact your unique supply chain. You may need to find additional temporary space to hold larger amounts of inventory until things return to normal.
Conversely, if you need to shut down your production facilities, that doesn’t mean your suppliers will be able to just as quickly slow their deliveries to you. Having a contingency plan and even space reserved in a 3PL facility or your own temporary outside warehouse will provide an outlet for the excess inventory.
If possible, consider moving inventory to areas least likely to be affected by coronavirus. While storing goods near large markets, ports, airports, and global logistics hubs is typically a good practice, these areas run a larger risk of a coronavirus outbreak. Have an alternate inventory plan in place just in case your usual storage locations are impacted.
Address Coronavirus Challenges With Phoenix Logistics
At Phoenix Logistics, we have a comprehensive portfolio of real estate, distribution, and transportation management services. We have strategically placed real estate available near many manufacturing and distribution centers including Flint, Dayton, Memphis, Milwaukee, Des Moines, Nashville, etc. https://phoenix3pl.com/locations/ If you find yourself in need of additional warehousing space or capacity in response to coronavirus or for any other reason, please email us or give us a call and see how we can help. In the meantime, follow us on Twitter to stay updated on the latest news about coronavirus supply chain impacts and other logistics issues.
(3PL – Corona – Logistics – COVID-19 – Corono/Corona – Supply Chain)