The holiday peak shipping season is barely out of sight for supply chain professionals, and now the supply chain is facing a new period of disruption. The coronavirus, also known as COVID-19, represents a risk to the global supply chain in 2020, and it is only a matter of time before it disrupts your freight network. As reported by John Divine of U.S. News:
- An alarming 938 of the Fortune 1000 companies had one or more tier-two suppliers in impacted regions in China.
- More than 90% of all companies globally with tier-one (direct) suppliers in impacted regions were headquartered in the U.S. Coming in second was Canada, with 7.5%.
Assessing the Risk of Coronavirus Disruption in Your Freight Network
The first issue to consider with the threat of the coronavirus is how governments and healthcare agencies are working to stop its spread. Manufacturers across more than a dozen industries are struggling to keep the impacts caused by COVID19 under control. As explained by the Harvard Business Review, the world’s largest 1000 companies and their suppliers have existing operations within coronavirus quarantine areas, shown by the below graphic.
Preparation Is Critical to Reducing Damage and Disruption
Best Practices in Preparing Against Coronavirus Disruption
- Expand your sourcing strategy to include more countries and suppliers, regardless of the novelty of a product from a certain manufacturer.
- Increase the number of carriers your organization works with to ensure plenty of capacity and volume throughout this current pandemic or other future disruptions.
- Encourage risk management through employee safety and wellness programs, relying on connected devices to share information and avoid face-to-face contact where possible, which will also help stop the spread of the coronavirus in local home communities as well.
- Leverage mobile technology to transform non-essential staff into remote workers, requiring staff only when absolutely necessary.
- Avoid reckless stockpiling of products. While arguments exist for increasing safety stock, do so based on data and demand forecasting, using analytics to consider the impact of coronavirus on shopper preferences and buying patterns.