Managing risk and disruption in supply chain during Covid 19

China’s dominant role as the world’s factory means that any major disruption puts global supply chains at risk. More than 200 fortune 500 companies have a presence in Wuhan where the outbreak originated and hit the hardest.Companies whose supply chain is reliant on Tier 1 or Tier 2 suppliers in China are likely to experience significant disruption.

How can organizations respond to the immediate change?

As the COVID-19 threat spreads, here are measures companies can take to protect their supply chain operations:

For companies that operate or have business relationships in China and other impacted countries, steps may include:

1.  Educate employees on COVID-19 symptoms and prevention
2.  Strengthen screening protocols
3. Restrict non essential travel and promote work from home
4. Focus on cash flow

For companies that produce, distribute, or source from suppliers in China and other impacted countries, steps may include:

1. Understand and activate alternate sources of supply
2. Update inventory policy and planning parameters
3. Enhance inbound materials visibility
4. Prepare for plant closures
5. Enhance workers planning

 

For companies that sell products or commodities to China and other impacted countries, steps may include: 

1.  Prepare for the rebound
2.  Conduct global scenario planning
3.  Understand the demand impact specific to your business
4. Evaluate alternate inbound logistics options