Will the Global Supply Chain Break as the World Reacts to the Coronavirus Outbreak?

Organizations are activating their business continuity plans to protect employees and customers and to understand the outbreak’s impact on business operations.

The World Health Organization (WHO) has declared the coronavirus to be a global health emergency. In the last few days, airlines have suspended flights to and from China. International personnel are being evacuated. The U.S. State Department declared a “do not travel to China” advisory. Transportation is being suspended and borders may close. The number of people infected is growing significantly on a day-to-day basis; as of Friday, Jan. 31, nearly 10,000 cases were confirmed in China.

Public health officials and the WHO are urging vigilance about the Wuhan coronavirus outbreak. While much of the news coverage is focused on the spread of coronavirus as a global health problem – what does it means to businesses operating in interconnected and complex global supply chains?

According to U.S. Health & Human Services data from the 2006 avian flu pandemic scare shared by ContinuityCentral.com, “A pandemic could sideline 40% of your workforce, shut down foreign trade, and degrade public services.” 

Key facts to know as well as information sources you can use to stay up to date: 

• Wuhan, ground zero for the outbreak, is one of China’s biggest industrial hubs
• Many companies are temporarily suspending operations and relocating employees or instructing them to work from home as organizations support efforts to limit the outbreak’s spread, as Business Insider first reported 
• The outbreak has taken place during the Lunar New Year holiday, so many companies in China are closed
• Continuing coverage by CNN, The Washington Post and on Twitter
• Map of 2019-nCoV Global Cases by John Hopkins CSSE
• Great data visualization by the New York Times

Impact on businesses:

• Wuhan coronavirus: tech firms including Alibaba, Tencent donate US$432 million to boost frontline efforts in Hubei province – South China Morning Post (Jan. 30)

• Hong Kong businesses cancel promotional events, launches and spring lunches as coronavirus fear grips city – South China Morning Post (Jan. 30)

• Coronavirus: Starbucks closes 2,000 Chinese branches; Starbucks has closed half of its outlets in China to protect its staff and support government efforts to contain the coronavirus – BBC News (Jan. 29)
• Ford to resume production at China joint venture with Changan on February 10 – Reuters (Jan. 29)
• Coronavirus disrupts business across sectors; The coronavirus has disrupted businesses from carmakers to tech firms following lockdowns across Hubei province – a key industrial hub in China – Chartered Institute of Procurement and Supply (CIPS) (Jan. 29)
• Coronavirus panic: Expert issues harrowing verdict on China’s downfall amid outbreak; A medical expert has warned that businesses could be severely affected by the deadly Coronavirus – Daily Express (Jan. 29)
• These are all the companies who have shut down operations in China over the deadly Wuhan coronavirus outbreak – Business Insider (Jan. 27)
• Major hotel chains waive fees as Wuhan coronavirus outbreak hits Lunar New Year travel plans of millions – South China Morning Post (Jan. 24)

Supply chain, risk management and business continuity perspectives:

• Supply chains plan for coronavirus disruption – Supply Chain Dive (Jan. 29)
• Apple supply chain braces for disruption from coronavirus – Bloomberg (Jan. 28)
• The Coronavirus is a threat to the global drug supply; The world's pharmaceutical supply chain is in danger as the virus spreads across China and jeopardizes travel and trade – Wired (Jan. 28)
• ‘The time to worry is now’: The coronavirus in China could threaten pharma’s ingredient sourcing – STAT News/Pharmalot (Jan. 27)
• What the Wuhan virus means for importers of China products – Quality Inspection (Jan. 27)
• China’s Coronavirus and your supply chain: Dealing with unknowns and false diversification – China Law Blog (Jan. 27)

Historical view of outbreak responses:

• 2019-nCoV Coronavirus: Assessing risk and planning initiatives – Continuity Central (Jan. 23)
• Factbox: How a Virus Impacts the Economy and Markets – New York Times/Reuters (Jan. 21) 

This is a curated collection of content, news, and stories created for the ethics & compliance community. These stories are not published or written by SAI Global, but rather, reflect the work of industry professionals and online outlets that you may want to read but could have missed.

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