At the time of writing, the novel Coronavirus begun in Wuhan – which has been named COVID-19 – is still a serious health problem in China and its surrounding territories. The current figures available here show an infection total close to 77,000. Deaths continue to rise, the total has topped 2,200. But recovery rates are still going strong and, at nearly 19,000, maintaining the 90/10 split with the death toll.
With a clearer idea of the impact on economy and the global supply chain, governments and businesses are beginning to make decisions against future shortages. Amazonis beginning to buy larger and more frequent orders from its suppliers; Singaporegovernment is adapting support for affected businesses within its 2020 budget and the British Government appears to be keeping an eye on potential impacts on the medical/pharmaceutical supply chain.
Amazon’s reliance on just-in-time delivery is one which has reduced operational costs and provided a flexible business model adapted to constant supply-and-demand. However it is beginning to realise the vulnerabilities of such an approach as it forecasts the impact of COVID-19. Prime Day, an annual summer sale event, is currently at risk from stock shortages caused by Chinese government shut downs of manufacturing businesses. They have increased the size of their orders and how frequently they will order, straying from their just-in-time model.
Amazon has been filtering vendors who have listed their sources as from China and over $10 million in annual sales. In some cases they have doubled or potentially quadrupled their orders from suppliers. Such orders have been accompanied by notifications such as “Amazon issued off-cycle orders to you last night in order to prepare for possible supply chain disruptions due to recent global events originating in China.” It remains to be seen whether Amazon’s strategies with insulate Prime Day against the impact of COVID-19.
Elsewhere, Singapore government looks to announce relief for suffering industries in its 2020 budget. Support is expected to focus on the tourist and transport industries, which have been hit hardest by the outbreak. This could come in the form of tax rebates on commercial properties and relief for aircraft landing fees. With China as its biggest export market and source of international tourism, Singapore will be hoping for signs of recovery soon. Its budget surplus over the last five years has put it in a good place to support its economy through the crisis.
Elsewhere, the British Government is keeping an eye on the horizon for potential impacts on the medical supply chain for the NHS. It has released an article aimed at reassuring all that the NHS is in no immediate danger of shortages and stocks of medicines are currently healthy. The government was keen to state that the NHS is well-equipped and well-prepared to deal with coronavirus should it arrive in force on UK soil. They are working together with MHRA to pre-emptively avoid shortages and minimise risks to patients dependent on vital medicines.
It appears that the economic turmoil of 2019 has left many better prepared to handle the shock of the COVID-19 health emergency. Between US-China trade wars and Britain’s agonising journey toward Brexit, many companies and government departments appear to have already begun preparations for economic uncertainty.
We continue to follow the COVID-19 outbreak and its impact on the global supply chain. Please check back regularly for more updates.