COVID-19: What new supply chain strains mean for all businesses

While the COVID-19 aka coronavirus situation is escalating quickly across the world, something that is evident is that supply chains that provide to retailers will see serious issues even six months from now. According to Forbes, because retailers follow a “two-season model with long lead times”, it is in about six months when US markets will really see the impact in products that require longer production times in manufacturing.

“Given that the Coronavirus originated in China and the sheer volume of clothing manufacturers that are based there, it is inevitable that there will be an impact on the fashion supply chain as factories shut and production slows.”

There is also going to be issues with other products that seem to be easy for us to get – especially if any of those products relied on parts from China. “Each product entails many elements before it reaches you: the raw material, the manufacturing, packaging, transportation and distribution.

Each one takes a journey using ocean, rail, air and road before being made available to your store or doorstep. Imagine each of these steps having its own complex supply chain network connected globally.” – Nick Vyas, executive director of the Center for Global Supply Chain Management at the USC Marshall School of Business.

Phsy.Org predicts that the US and Global Supply Chain will adjust by working with manufacturing warehouses that are closer to home (say Mexico) and will work to quickly mitigate risks but also this will require a complete re-design of our current global supply chain structure. No longer will cost be the only factor, but companies will be looking for providers that can help them mitigate risk, supply chain resiliency and a push for more diversification.

Small business retailers are reporting a variety of impacts – some which don’t seem so big today but can grow exponentially as their events and trade shows are cancelled where they used to be able to meet new clients and potentially sell more wholesale products and meet distributors.

“Laurie O’Hara, founder and CEO of Olita, an all-natural and organic skin-care company based in San Rafael, California, said she sells nationwide on Amazon and to surf shops and beach boutiques, as well as in hotels, resorts, grocery stores and pharmacies. The company has a large footprint in Hawaii and a growing presence in California and Florida. O’Hara has had two trade shows cancel, costing her out-of-pocket cash, and Olita has also experienced shipment delays.”

Other issues have been not receiving products via their supply chain, slower foot traffic in their brick and mortars and some employees calling in sick.

There is no doubt this virus affects every single person, company, small to large business, entrepreneur and product we interact with. The initial stories of grocery stores not being able to stock up shelves fast enough to hospitals not having enough beds for those who are sick – let alone N95 face masks.

Six months seems far away and not that far off and this story seems to keep evolving by the day. We must continue to rely on each other for how to best protect ourselves/loved ones from the spread. We must search far and wide for any positive outcomes or silver linings. We have to keep the human capacity for resiliency top of mind. And really consciously consider where to spend our dollars that may help out businesses the most.