How Coronavirus is Affecting the Supply Chain?
The government, health institutions, and the society around the globe are consistently seeking new ways to break the chain of Coronavirus outbreak. The rise in several Coronavirus cases has showcased an adverse impact on the global economy including the logistics supply chain.
The impact of the virus on the global economy has caused the alterations in-stock rate, shut down of certain organizations, and delay of project completions.
The spread of Coronavirus or COVID-19 has hindered the supply chain operations of numerous companies, especially in the US. There has been a drastic fall in the production and supply of multiple goods in China, which has contributed to the revenue loss worldwide. This has drastically affected the freight and shipping process.
The increased number of quarantined workers and the wide shortage of resources has led to the downfall of supply chain operation amid this Coronavirus spread. China has been the world hub for the production and operation of goods but with the outbreak of the deadly virus in Wuhan, the global economy has come to a standstill.
Most of the companies and factories have been shut down owing to the pandemic crisis. A majority of the companies across the world depend on China for their business production and operation. Regardless of a company’s nature, most of the organizations depend on a network of suppliers for distributing their products and services.
The movement of goods has been affected due to the large shortage in the air and freight facilities. Studies have revealed that there has been a drop of nearly 2.2% in the parcel associated with healthcare along with a 1.8% fall in the automotive parts.
To be precise, the spread of Coronavirus can have the following effects on our global economy.
Hindering the global movement of goods (supply chain)
Reducing the employment
Causing widespread hindrance in the global production
Shut down of stores and business, thereby, less spending
Exposing the numerous challenges in the supply chain
As it is declared as a national emergency by the US and a pandemic by WHO (World Health Organization), global retailers are facing significant implications, apart from the areas of sourcing and production.
20% of the US retailers are largely exposed to China. The supply chain of the footwear industry is one of the largest affected segment as most of the raw materials are imported from China. Studies reveal that an approximate of $700 million could be at stake with the outbreak of Coronavirus.
May to June, is largely that period of time when the retailers prefer to ship the goods for the upcoming holiday season. But, with such an existing scenario of Coronavirus outbreak, it can have a greater adverse impact on the holiday season. Bringing out a futuristic solution can help the global economy from the complete breakdown.