It started as a localized outbreak of a new viral disease in one part of the world. Within weeks, the virus, now known as COVID-19 or the novel coronavirus, became an international disruptor and caused shutdowns of manufacturing and other businesses worldwide to prevent the spread. Within days, shortages of a wide range of consumer products were evident as consumers bought what they could in case of a forced quarantine. Workers were quickly divided into “essential” and “non-essential.”
Despite the disruptions that have taken place in recent years, including Hurricanes Harvey, Maria, and other disasters, many companies were utterly unprepared for the advent of COVID-19. As a result, many companies were caught off-guard.
The Department of Homeland Security suggests that citizens keep a two-week supply of water and food as well as other supplies for the possibility of any emergency, including shelter-in-place and the current pandemic. When it became evident that large numbers of people would be self-isolating and staying home, shopping in preparation for the possibility of quarantine left store shelves empty worldwide within days. Manufacturers were left scrambling to replace products and get them to consumers, who, seeing empty shelves, begin panic buying.
This isn’t the first time a global disease outbreak has had a significant effect on the supply chain. But the broad-scale impact of this virus in country-by-country infections and self-isolation has left the supply chain sputtering.
After Japan’s 2011 earthquake in 2011, automobile manufacturers were directly impacted. The companies rely heavily on parts that are made in Japanese factories right in the area of the earthquake. SARS in 2003 had a similar impact on worldwide supply chains.
Following these kinds of incidents is the talk about supply chain risk management, particularly with supply chains that are in different parts of the world. But it became apparent that a disruption in one part of the world, such as China, has a global impact, preventing the entire chain from the input needed elsewhere. In this case, nearly the whole country shut down and put everyone in isolation.
In the case of COVID-19, nearly all of the pieces of the supply chain were affected:
While many Americans began working from home, other workers’ jobs could not be converted to virtual. Several parts of the chain were dropped as workers became ill, and others were sent home for safety.
Even with goods produced in the US, widespread worker illness can still shut down a factory or a part of the supply chain if there aren’t enough employees to keep the chain going. Illness also means lost work and production time if an employee contracts COVID-19 (or other pandemic illness) and unknowingly exposes others to it. At this point, the company needs to have its facility cleaned and sanitized before employees can return to work, which can take many days.
While there is talk in the US about bringing manufacturing home, one way to mitigate the possibility of an absent supplier is to diversify the supply base and have multiple sources. If one source is out of commission, a different supplier in another area or country may be unaffected by the emergency. Optimizing various suppliers could be the next trend in supplier management to mitigate the possibility of disruptions from one area.
Let 3PL Worldwide Be Your Supply Chain Partner
If you need help with some, part or all of your supply chain, call us. We can help with shipping, warehousing, delivery, and so much more. We also offer additional help, such as call center services and bicoastal warehouse space in Southern California and Connecticut. Based in Southern California, we serve supply chain customers nationwide. Contact us today to learn more at (877) 444-0002 or use our online contact form.