How Coronavirus Is Affecting The Global Supply Chain?

How Coronavirus Is Affecting The Global Supply Chain?


What is Coronavirus?

According to WHO, Coronaviruses(CoV) are a large family of viruses, which are zoonotic, meaning they transmit between animals and humans. The crown-like spikes found on the surface of the virus gives it the special prefix “Corona”, meaning “crown” or “halo” in Latin. These viruses are known to cause a significant proportion of all common colds in adults and children and can lead to more severe diseases and even death.

The outbreak of the novel Corona Virus

The “novel Corona Virus” was given its official name on 11 Feb. 2020 as “severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)”, the disease associated with it referred to as COVID-19.
The outbreak of the virus first came into notice when a cluster of cases of pneumonia, with unknown causes, were reported in the City of Wuhan, China. The case was informed to WHO on 31st December 2019 and on 30th Jan. 2020 the outbreak was declared a global health emergency.

The Impact of the outbreak on the global supply chain

China is well known to be the world’s leading economy in the manufacturing and export of goods. It is also known to be the fastest-growing consumer market and the second-largest importer of goods.
The outbreak of the epidemic, COVID-19, has raised global health and economic unrest. The largest quarantine in human history has been imposed by the Chinese government as a preventive measure to curb the spreading of the disease. 46 million people have been impacted in the effort, with the added effect in the business operations due to the factory shutdowns, workers stuck in their hometowns and travel lines being restricted. The result is a major slowdown in the world’s shipping lines and there is an expected fall in the production supply of almost everything, from cars to smartphones. 

Due to the rising numbers of cases and the yet unknown factors to the breakout, the exact consequences of the epidemic on the business operations are difficult to be precisely predicted. But, some notable impacts can already be observed across the global supply chain including:

  • Labor: The government norms and the quarantine guidelines can make the availability of white and blue-collar laborers tough and unpredictable.
  • Logistics: Limitation policy in the established hubs and supply network of affected areas will require investing efforts in identifying alternative routes for logistics, which will be a huge challenge for smaller players.
  • Raw Material: The transportation restrictions along with the labor distribution can severely impact the supply of raw material and finished goods.
  • Sourcing: Travel restrictions and factory shut down in the affected areas will impact the ability to explore, discover and transact to fulfill new opportunities.

Leave a Reply