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Measuring COVID-19's impact on the world's supply chains.

While COVID-19 pummels the world's supply chains, groups like the Institute of Supply Management (ISM) are trying to wrap their arms around the short- and long-term impacts.

ISM looked specifically at the business and supply chain impacts and found that nearly 75% of companies are already reporting disruptions in some capacity due to coronavirus-related transportation restrictions.

More than 80% believe their organizations will experience some impact because of COVID-19 disruptions. Of those companies, ISM says that one in six (16%) report adjusting revenue targets downward an average of 5.6% due to the coronavirus.

"The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak," said ISM CEO Thomas W. Derry in a press release.

"For a majority of U.S. businesses," Derry continued, "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."

Tracking Key Procurement Trends

Breaking down the results of its survey, ISM says these key trends emerged:

* 57% of firms noted longer lead times for Tier 1, China-sourced components, with average lead times more than doubling compared to the end of 2019.

* Manufacturers in China report operating at 50% capacity and with 56% of their normal staff numbers.

* Over 44% of respondents do not have a plan in place to address supply disruption from China.

* Of those, 23% of companies report current disruptions.

* Of the companies expecting supply chain impacts, the severity anticipated increases after the first quarter of 2020.

* Six in 10 (62%) respondents are experiencing delays in receiving orders from China.

* More than half (53%) are having difficulty getting supply chain information from China.

* Nearly one-half of companies surveyed are experiencing delays moving goods within China (48%).

* Almost one-half (46%) report delays loading goods at Chinese ports.

Stay Tuned for More

Conducted between Feb. 22 and March 5, ISM's survey was based on 628 respondents largely representing U.S. manufacturing (52%) and non-manufacturing (48%) organizations, 81% of which have revenues of less than $10 billion (USD). Respondent roles range from emerging practitioner (4%), to chief procurement officer (6%), with 73% being experienced practitioners, managers and directors in a supply chain management role.

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Title Annotation:INDUSTRY REPORT
Publication:EE-Evaluation Engineering
Geographic Code:9CHIN
Date:May 1, 2020
Next Article:Texas Instruments Plans to Build Up Inventory as Uncertainty Looms.

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