”As COVID-19 spreads globally, we are seeing increased supply chain disruption, but also changes in consumer spending habits,” commented Sarah Watt, Senior Director Analyst with the Gartner Supply Chain practice. “Supply has been impacted in three primary ways: limited access to employees due to quarantines, factory closures or manufacturing slowdowns and limited access to logistics to move goods. Most supply chain organisations are in crisis management, assessing impacts and response on a daily, if not hourly basis.”
Constraints Get Made
Governments worldwide got pushed to formulate plans to help limit the impact of COVID-19. The restrictions imposed globally have restricted our movements as we get told to stay at home.
These constraints have disrupted just about every person, and every industry regardless of location or vertical, not least of all the manufacturing industry where supply chains are not functioning as intended:
The Reality Hits Home
Those that manage to overcome these challenges often then find that trucking, shipping, and freight services are unavailable or operating at reduced levels, preventing the movement of goods required to meet the customer’s demands and expectations.
- Numerous essential raw materials finished parts suppliers are dealing with multiple restrictions and health inspections
- Movement of components and the final product gets restricted throughout major transportation arteries
- Stock production has been put on pause regardless of its life cycle
- Businesses looking to find substitute suppliers are experiencing increased costs
Everyone Is Affected
However, these disruptions aren’t limited to just suppliers. Entire logistics networks, manufacturing bases, and their workers are facing a multitude of unprecedented challenges, and as a result, supply chain managers are getting forced to:
- Analyze and forecast the impact of the disruption on consumer-demand patterns
- Consider how spending patterns are changing due to panic buying due to increased focus on essential goods
- Consider product availability and how to give the customer what they want when they want it
Research performed and released by dun & bradstreet in their ‘Business Impact Of The Coronavirus’ report shows that
- At least 51,000 (163 Fortune 1000) companies around the world have one or more direct or Tier 1 suppliers in the impacted region, and at least five million companies (938 Fortune 1000) around the world have one or more Tier 2 suppliers in the impacted region.
- The top five major sectors that account for over 80 percent of the businesses within the impacted provinces include services (personal and business), wholesale trade, manufacturing, retail, and financial services. Among these sectors, services, wholesale, and manufacturing account for approximately 65 percent of the businesses in the impacted region.
What Can You Do?
It is essential businesses increase their focus on resilience, risk exposure, and their business continuity plans going forward. Deploying an orchestrated visibility and execution platform such as that provided by the Gravity helps mitigate risk and enables a competitive edge. Gravity’s Source product seamlessly integrates with it’s purchase order management (POM) to bring complete visibility to the entire business ecosystem, not solely the supply chain, enabling all stakeholders to leverage the power of data for smarter planning and efficiency.
