The effects of Coronavirus:
The outbreak has become massive and now creating obstacles in several things like business, sports and other important engagements not only in China, rather says the whole world. For instance, the Tokyo Marathon Foundation has cancelled the amateur portion of the event in Japan, which is going to affect approximately 38,000 runners. Like sports, the impact on the supply chain is also disturbed. One of the world’s largest industrial hubs, Wuhan city – the epicenter of the virus is now totally closed down and struggling for the impact.
How procurementfrom China is being affected by Coronavirus?
The pandemic has been now spread in overall 23 countries and as a consequence, a large number of airlines have decided to cancel the flights to and from China. Like airlines, sea freight is also affected and it results in a delay in transporting the goods from China to other countries. The whole process has started impacting business agenda. Due to the restrictions on flights, some international firms have been shutting down their office premises in China.
As a result, the commodities market is breaching new lows over the past few days. The broader economy as well as is crashing down. The decrease in demand has become the reasons behind the price cut for many products. To mention, the Bloomberg Commodity Index has fallen by a rate of 6%.
How to Protect your Supply Chain?
Speaking of the supply chain, unlike other affairs, it can be managed. The risks, coronavirus has created can be solved by following the recommendations, which the experts are giving these days.
- First and foremost, all businesses have to survey the suppliers now and start to mitigate the issue.
- The second suggestion is stockpiling. Though it is too late, they have to stockpile as much and as soon as possible.
- It would be great to look for alternate suppliers and think about the long-time consequences. Besides, considering the current scenario on the broader economy would be also beneficial. If you source a certain RM or FG only from China, find alternate suppliers from other countries keep 20-40% supplies from them.
The bottom line:
What is happening right now – is too bad for a country like China. The whole world is suffering from this. But we know, everything will be cured and there will be sunshine. What we can do now – we can think of the alternate solution and protect the economy before a complete loss. Hope the above-mentioned procedure will be a help all the procurements. Hope, you do not forget to take long term measures too.