The coronavirus pandemic has affected almost every sector of business. Normal life and spending have stopped across the world. Millions of people have gotten laid off.
The outbreak has also disrupted the manufacturing industry. Thousands of companies have been forced to shut down assembly and factories. This has most harmed the companies that rely on factories in China for materials.
Keep reading to better understand how the COVID-19 outbreak has impacted the global supply chain and manufacturing industry.
Effects of Coronavirus Pandemic on the Global Supply Chain
Some companies are still able to operate and are using the inventory they have or have been able to get. Without any extra supply, they can likely continue business for another few weeks.
But if the supply of parts continues to be disrupted, they will need to stop manufacturing. Many manufacturers have already changed production in their plants, even outside of China.
This is because even when a factory is in another country, they’re still receiving parts from China. Fiat Chrysler Automobiles has seen a lot of disruptions in its supply chain.
In a survey from the National Association of Manufacturers, the respondents listed the resources that would help them now. They explained they need reliable information with nonpolitical facts.
They also noted wanting clear and timely updates on new restrictions. Additionally, respondents said information about how other companies are reacting would be helpful.
These manufacturers are already dealing with disruptions to their business and facing financial consequences. There are also many operational issues that have come up.
Nearly all automakers have announced that they’re closely monitoring the situation. They’re also planning to make decisions based on the products still available.
Impact on the Automotive Supply Chain
The global automotive industry will also be impacted. This industry imports billions of dollars in motor parts from China. Parts mass production has been affected and the impact starts at the bottom of the global supply chain industry.
The tool industry is usually based in China at a low cost. This industry has been experiencing 30 to 60-day production delays. These delays could grow, but it depends on the duration of this outbreak.
The delay in the supply chain will eventually prevent automakers from launching new vehicles. This kind of change also affects the economy. It’ll be difficult for these companies to make revenue predictions for the next year.
China also represents one of the largest consumers in the automotive industry. By February, car sales dropped 80% in China. This has impacted the entire industry’s ability to meet revenue forecasts.
Impact on the Pharmaceutical Supply
Another industry harmed by the COVID-19 pandemic has been the pharmaceutical supply. This has caused panic for many health officials and patients. Many are worried about the shortage of prescription drugs when thinking about supply chain management.
The majority of ingredients that are in these medications are made in factories in other countries. Most of the factories are in China.
It seems the supply disruptions haven’t changed production for all pharmaceuticals. Many facilities are still creating these medications.
Many pharmaceutical companies have been able to get their supply of ingredients without issues. This could change in the months ahead. Manufacturers continue to take extra precautions to avoid the virus.
Some pharmaceutical companies are having employees change their hours. This is meant to keep up with the most recent health advice. It has slowed the production and testing of some new medications, which could have an impact in the coming months.
Since March, some projects were able to continue without interruption. But others were delayed for up to four weeks.
In general, this kind of change doesn’t cause serious delays. Yet, a lot of companies who have resumed manufacturing are anticipating a second wave of setbacks. Health officials are keeping a close watch on these trends.
Effects of COVID-19 on Tech and Other Industries
The challenge that coronavirus is posing on the global supply chain is also affecting the tech industry. On February 17, Apple announced that it’s expecting quarterly earnings to be lower than previously expected. This was just the beginning of many tech companies making similar announcements.
The supply of parts for the iPhone and other technologies will be made difficult. Most of these parts are made in China and will have a constrained supply. These companies are not only dependent on Chinese factories, but also on Chinese consumers.
The spread of coronavirus also caused the cancellation of many important tech conferences. The Mobile World Conference was meant to happen in February. This conference helps to create new business partnerships.
This pandemic has also highlighted the need for certain types of technology. A 5G network can make for remote interactions at a higher speed. Also, teleconferencing and telehealth have increased in their use.
Other industries, like ports, ships and harbors are being affected. It will be difficult to say where the effects will stop for the global supply chain. This has caused a lot of uneasiness for businesses as they need to be able to predict trends in revenue.
Understanding What’s Ahead for the Global Supply Chain During Coronavirus
There’s a lot ahead for the global supply chain as the world braces for major effects on manufacturing. This pandemic has affected nearly every country in the world, so its impacts are widespread.
Congress has been looking at relieving certain tariffs to help the situation. It’ll be important to pay attention to all these changes to take a look at where we are heading.
Keep reading more of our news stories here to stay informed on all the biggest updates about this pandemic.