Coronavirus: How Will it Impact Supply Chains? By Benjamin Gordon

Benjamin Gordon as the Coronavirus continues its global devastation, infecting over 100,000 people worldwide. Supply chain companies are eager to stay ahead of industry disruptions. The current pandemic has caused globally diminishing travel, regional lockdowns. And changing consumer habits as people become more distressed about the situation. With its full impact still to be determined, it is currently unclear what economic challenges the industry may face. A stark contrast to the positive projections given at the beginning of 2020.

Supply Chain Brain

On January 30, the day the W.H.O declared a state of emergency, Managing Partner for BG Strategic Advisors (BGSA) Benjamin Gordon conveyed reasons for optimism in an article he authored for Supply Chain Brain. Benjamin Gordon, a heralded expert in supply chains, recognized the looming threats on the horizon. Including a potential recession, the 2020 election, and increasing tensions with China.  Yet Gordon sees several factors that will boost supply chain growth.  In particular, 20% growth in e-commerce is driving ripple effects that will increase logistics spending. For that reason, 60% of CEOsat Gordon’s BGSA Supply Chain Conference predict at least 10% growth this year.  Gordon believes that now, more than ever, supply chain companies face opportunities to thrive.

Although Gordon’s article made its debut before the Coronavirus truly surged, other experts have articulated viewpoints that confirm. Gordon’s initial assessment of logistics and supply chain markets. Cornell University professor Karan Girotra believes that since the Coronavirus is slow-moving, companies. Have time to adjust plans, unlike a sudden natural disaster. Girotra states that panic buying is the true problem at hand, with people offsetting local supplies of things they may not need, such as facemasks.

Supply Chain Organizations

It is possible to challenge elements of Gordon’s optimism. For instance, supply chain organizations face risks with respect to a lack of preparation. Companies that have failed to diversify their sourcing, for instance, could find themselves running short of components if they are dependent on China. Similarly, organizations that have slashed their inventory too low levels could also encounter shortages. But these challenges are primarily a function of contingency planning. Supply chain leaders who diversified their supply base and built up adequate safety stock should find themselves in a much stronger relative position. In short, now is a time that rewards companies who have taken the time to develop stable supply chain strategies.

Although the true tragedy of the Coronavirus lies within the lives lost, it is a welcome prediction that most supply chain company who have made effective planning efforts will be largely unaffected.

Of course, the disease is still evolving, and it’s impossible to predict with 100% accuracy what the future will hold.  Many argue that supply chain companies will face extreme setbacks regardless of their planning measures and that major revenue loss is to be expected.  Regardless of what camp a supply chain expert such as Gordon or Girotra may represent, it is most important to remain calm, look for logical signals about the situation, and use solution-based, rather than fear-based decision making.