Medical masks are definitely more visible at the moment, but are the businesses reliant on complex supply chains taking the same precautions against the impact of coronavirus? The Department of Health has reassuringly employed contingency planning in the build-up to the Brexit vote, in addition to current impact assessments. That stockpiling, preparation and collaboration with NHS supply chain should help minimise potential impacts to medicines and medical supplies.
Other industries reliant on International (mainly Chinese) manufacturing might be harder hit though. According to The Society of Motor Manufacturers and Traders, there are over 2,500 automotive suppliers in the UK who collectively employ around 78,000 people. With highly complex supply chains made up of raw materials, components, sub assembly, assembly and beyond the potential knock-on effects caused by interruptions anywhere in the supply chain could have significant impacts on thousands of businesses and that has a human impact like the virus itself.
Searching for signal… The warning signs are apparent in other industries too.
China has been the largest manufacturer of mobile phones for many years now. With factories and offices being closed in attempts to quarantine the spread of the virus, the short-term impact of those closures is hard to argue. More worrying is the potential longer-term effects if attempts to confine the spread of COVID-19, as it’s now been named, are not successful. Gauging the extent of the impact without more evidence of the spread of the virus, the ability to restart operations and supply chains and the multitude of permutations depending on those and other factors is hard.
The ‘flu season’ for retailers looks like it might intensify too. The woes of the high street have been well documented over the last few years, but interrupted supply chains might just lead to empty shelves too.
RetailWeek report that expected impacts at present should be no more than modest in general, but a number of well-known retailers including DFS, Superdry, Joules, Adidas, H&M and Burberry have reported varying degrees of impact to their operations. With Burberry confirming the closure of over a third of their China stores.
So, what does all this mean? Aside from the tragic human impact, it’s difficult to assess how far ranging the effects will be. What is definite, is that businesses in a broad range of industries will be negatively affected. Time will tell just how damaging it could be.
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