Considering the fast-paced news cycle on the outbreak, Procurement Leaders has compiled some external articles to keep members current on the most recent news concerning coronavirus.
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NEW: Coronavirus crisis exposes the risk in low-cost supply chains that criss-cross the world (The Daily Telegraph)
As factories across Europe shut down as coronavirus tore through industry, the weakness of global supply chains was exposed on a huge scale.
NEW: New supply chain risks emerge as production lines restart in China’s factories (Theloadstar.com)
While the majority of factories are re-opening in China, a new batch of risks is emerging that could bring further disruption to supply chains. These include the unstable supply of raw materials, a lack of skilled workers, logistics issues from sub-suppliers, pressure to produce quickly and increased scrutiny from government and regulatory agencies.
NEW: China to improve supply chain by airfreight (Asia Times)
China’s State Council has said that it will increase its international airfreight capabilities and enhance cooperation with global airlines in order to improve its airfreight network.
NEW: Nissan suppliers feel pain from payment delay (Sky News)
Sky News reported that automotive giant Nissan, which operates the UK’s biggest car manufacturing plant, recently notified suppliers that payments they were due to receive would not arrive on time. This, the company said, was part of the disruption is was facing from coronavirus and explained that it would make payments as soon as possible.
UK financial services firm, TSB, has said that it will ensure that all of its smallest suppliers will be paid within just 10 days of invoicing the bank. The move will apply to all companies that supply goods and services to the bank, even if the contract allows it to pay over a longer period.
Freight carriers are struggling to deliver goods by land, sea or air as the coronavirus pandemic forces Western governments to impose lockdowns, threatening supplies of vital products including medicines into the most affected areas, such as Italy. Problems ranging from finding enough truck drivers to restrictions on seafarers and a lack of air freight are hitting the smooth flow of goods, say freight logistics operators.
How China can rebuild global supply chain resilience after COVID-19 (World Economic Forum)
As China returns to work, suppliers in the country have turned to innovative solutions that will work to keep supply chains operating during future risk events.
Public to pay suppliers even if services are suspended (Financial Times)
All public authorities, including councils, schools, government departments and hospitals, should keep paying suppliers even if services have been scaled back or are temporarily suspended, the UK government has said.
Boeing has halted production of most widebody jets while Airbus has only restarted partial output after a four-day shutdown as suppliers cut jobs.
GM suppliers preparing to manufacture parts for 200,000 ventilators (Modern Healthcare)
Parts suppliers for General Motors Co. are preparing to manufacture parts for at least 200,000 ventilators in an effort to stave off a projected shortage of the machines in the fight against the deadly respiratory illness COVID-19.
While there may be a shortage of some premium imported goods, the vast majority of goods will be available to the public over the coming weeks and months, according to three supply chain experts.
Volvo back to ’normal’ in China as it shuts EU and US car plants (Financial Times)
Volvo Cars said its Chinese business had returned to “normal”, offering a ray of hope to European and US carmakers that have shuttered operations in the face of the global coronavirus pandemic.
Jaguar Land Rover to suspend operations at all UK plants (Financial Times)
Jaguar Land Rover will close its UK plants over the next week, the last of Britain’s major manufacturers to shutter its facilities as a result of the coronavirus outbreak.
Supply chains face liquidity crunch as transactions tank (just-style.com)
Global business-to-business transactions have fallen by 62% since the beginning of March, according to data released by Tradeshift. This is expected to have a significant impact on liquidity within businesses.
European ports vow to keep supply chains moving (Lloyds List)
The resumption of factory production in China will see exports on the rise again. But as the centre of attention for coronavirus shifts to Europe, ports will need plans in place to handle imports.
Europe’s largest suppliers keep factories running (Automotive News Europe)
Automotive suppliers across Europe are keeping their factories open and running despite the disruption faced by coronavirus.
Boeing is reportedly seeking tens of billions of dollars in US government aid for itself and its suppliers in an effort to weather the coronavirus crisis, people familiar with the matter told Bloomberg.
Aggregating data from CDC, ECDC, Wikipedia, and The World Health Organization, technology giant Microsoft has launched a coronavirus tracking tool that is aimed at providing valuable and truthful information around the spread of the virus.
Coronavirus pandemic will disrupt international supply chains(Chemistry World)
With the US Food and Drug Administration (FDA) actively monitoring the availability of over 20 drugs, there are concerns surrounding the disruption the virus is causing to chemical and pharmaceutical supply chains. While China is gradually returning to work, some raw materials and active pharmaceutical ingredients (APIs) are still proving difficult to get hold of.
VW does not expect China slowdown to disrupt its global supply chain, report says (Automative News Europe)
Volkswagen Group does not expect supply bottlenecks from China to disrupt the its global production network and it anticipates a quick rise in demand for cars once the worst of the outbreak has passed.
Companies’ supply chains vulnerable to supply chain shocks (Financial Times)
As businesses grapple with the disruption created by the outbreak, supply chain analysts warn that there could be a further six months of uncertainty before things return to normal.
While there has been an uptick in output from China, actually getting goods out of the country remains a challenge and there could be difficulties ahead.
Cost of coronavirus impact on global supply chain at $50bn, says UN (poundsterlinglive.com)
The United Nations reports that the slowdown of manufacturing in China due to the coronavirus outbreak could result in a $50bn decrease in exports across global value chains.
Coronavirus updates: Governments shift focus to containment, as virus spreads globally (New York Times)
With the threat of a full-scale pandemic growing by the day, governments around the world shifted their focus on Tuesday to devising plans to contain the spread of the new coronavirus rather than stamp it out, and to do so without causing widespread social disruption and economic upheaval.
Yes, it is worse than the flu: Busting the coronavirus myths (the Guardian)
Many individuals who get coronavirus will experience nothing worse than seasonal flu symptoms, but the overall profile of the disease, including its mortality rate, looks more serious.
Coronavirus: Will China’s economy shrink for the first time since the cultural revolution in 1976? (South China Morning Post)
Plunges in official and private sector purchasing managers’ indices amid the coronavirus outbreak prompted sharp revisions of economic forecasts.
US supply chains and ports under strain from coronavirus (Financial Times)
US ports are bracing for cargo volumes to decrease by around 20% during the first quarter of 2020, according to the Financial Times. With production rates significantly down in China, the impact on global supply chains could be “crippling”, market analysts say. This could lead cause companies to review whether China should remain a central pillar of their sourcing strategies in future.
How coronavirus could impact the global supply chain by mid-March (Harvard Business Review)
The peak of disruption on global supply chains will hit in mid-March, according to Harvard Business Review, forcing the majority of manufacturing organisations to shutter production. This is based on the fact that most companies keep 15-30 days’ stock on hand, plus a little extra around Chinese new year, which when added to the shutdown would have seen final shipments arrive at the end of February. Once those supplies are depleted, production will have to stop.
Bentley and McLaren have said that car production, the majority of which is carried out in the UK, has not yet been affected by coronavirus. Both automotive firms have been able to secure supply from China for a period of time and have also looked for alternative suppliers.
The World Health Organization estimates that some 89 million masks will be required every month to respond to the epidemic, as well as 76 million examination gloves, and 1.6 million pairs of goggles. But the prices of these goods have spiked; masks are now six-times more expensive, respirators have trebled in price and gowns are now twice as expensive. The health body has accused medical suppliers of cashing in on the crisis.
A partly unexpected consequence of the outbreak has been a significant drop in pollution in China. Satellites operated by Nasa and the European Space Agency have detected significant nitrogen dioxide levels decreased significantly in February compared with January. The noxious gas is emitted by factories, motor vehicles and fossil fuel-powered electricity generation stations.
One of the longer-term consequences of the virus is expected to be a rise in the number of robots that manufacturers deploy on production lines in future. In recent years years, China has been undergoing a so-called “robotics revolution.” Now, the impetus is expected to be even greater to embrace automation to reduce disruption.