Only when a major event happens do you fully understand how supply chains work.
The respiratory illness Coronavirus (2019- cNOV) is new in the landscape of human health. Over 900 people have now lost their lives across the world from this virus believed to have originated in the Wuhan province of China.
When it was initially reported, you may not have connected this health emergency with your day to day business selling information technology. But the two are related.
Many of the factories that produce the products for our industry are located in China. Currently, the Chinese government is issuing orders for factories to remain closed to reduce the risk of further spread of the virus.
Global supply chains are intrinsically linked and their ‘just in time’ nature means that stock in the entire chain has been optimised to be as efficient as possible between vendor, stock on the water, goods held locally by vendors, by distributors and then ultimately by resellers (you).
Already, we have seen factories shut for two weeks and port authorities requesting workers not to attend, which means a reduction in ships sailing. A report from a major logistics provider reveals that sailings of 59 container ships from Asia to Europe have already been cancelled. To put that in context, that’s the equivalent of 1.3 million 20ft containers.
You won’t see the impact of this quickly as stock in the distribution channel and stocks held by a vendor locally create a buffer of up to 12 weeks, but should it go on any longer availability will decline.
This emergency is a clear demonstration of the connectedness of our global supply chains and the inter-connectedness of our world when it comes to public health, sustainability and the environment.
It only takes one pebble in the pond to create a ripple effect. Let’s see what the coming weeks and months brings
See you out there.
Phil Jones MBE, Managing Director, Brother UK