Supply Chain Disruptions Rise Due to Virus
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The coronavirus is having a growing impact on supply chains, according to a new survey by the Institute for Supply Management in a report the Tempe, Ariz.-based nonprofit released March 11.
Nearly 75% of companies are reporting supply chain disruptions due to coronavirus-related transportation restrictions, and more than 80% believe that their organization will experience some impact because of COVID-19 virus disruptions.
The survey says, of those companies, 16% already have reported adjusting their revenue targets down by an average of 5.6%.
.@ISM research finds #coronavirus is handcuffing supply chains: Three-fourths of U.S. companies report breakdowns due to transportation restrictions, and more than 80 percent of organizations expect to be impacted by #COVID19 disruptions. #procurement https://t.co/tMQNOcW87S — Institute for Supply Management (@ism) March 11, 2020
“The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” CEO Thomas Derry said in a statement. “For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled.”
Also in the survey report:
- 57% said there are longer lead times for tier 1-sourced components from China, with the average lead times more than doubling compared with the end of 2019.
- Manufacturers in China report operating at 50% capacity with 56% of normal staff.
- 44% of respondents do not have a plan in place to address supply disruption from China.
- Of the companies expecting supply chain impacts, the severity anticipated increases after the first quarter of 2020.
- 62% of respondents are experiencing delays in receiving orders from China.
- 53% are having difficulty getting supply chain information from China.
- 48% are experiencing delays moving goods within China.
- 46% report delays loading goods at Chinese ports.
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