10 Top Supply Chain Risks amid the Coronavirus Outbreak

10 Top Supply Chain Risks amid the Coronavirus Outbreak

Global manufacturing and supply chains are continuing to feel the effect of the Wuhan novel coronavirus epidemic as factories and logistics providers seeking to resume operations now face labor shortages and regulatory uncertainty. As of February 13 09:00 GMT, the outbreak has already claimed the lives of 1,368 people, with over 60,000 cases being reported worldwide.

While companies draw up contingency plans for production, supply and logistics services to cope with this complex and fast-changing situation, the crisis now looks to have the potential to disrupt global supply chains until April or beyond. While production-related challenges may be overcome in the coming weeks, limited inbound and outbound capacity could become the biggest obstacle in the months of March and April for supply chains to normalize. Chinese media organizations have put forward March 1 as the date when production schedules could return to near-normal operations; however, this will largely depend on when the outbreak will peak. Given the fluidity of the situation and the vast operational and financial implications across several industries, it may take companies several months before being able to assess how the event will have impacted their bottom line.

To help supply chain risk managers keep abreast of the situation and initiate risk mitigation plans, Resilience360 has outlined the top ten challenges organizations will need to prepare for in the short and medium term amid the ongoing coronavirus outbreak. The main challenges include labor and supply shortages in factories, regulatory uncertainty regarding production restarts, public health requirements, a growing number of suppliers invoking force majeure clauses, a shortage of trucking capacity, closed borders between China and Hong Kong and Vietnam, inbound congestion at airports and ports, reduced outbound capacity on ocean carriers, price increases for air and rail freight and ripple effects through supply chains beyond China.

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