75% of Companies Suffer From Coronavirus Supply Chain Disruptions

Mish

The Institute for Supply Management® (ISM®) has a special report today on supply chain disruptions.

Lengthy Recovery to Normal Operations

The lead image is from Axios. The ISM has more details.

Please consider the ISM report COVID-19 SURVEY: IMPACTS ON GLOBAL SUPPLY CHAINS.

Nearly 75 percent of companies report supply chain disruptions in some capacity due to coronavirus-related transportation restrictions, and more than 80 percent believe that their organization will experience some impact because of COVID-19 disruptions. Of those, one in six (16%) companies report adjusting revenue targets downward an average of 5.6 percent 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 Thomas W. Derry, Chief Executive Officer of ISM. “For a majority of U.S. businesses, 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.”

Key Points

  • 57 percent 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 percent capacity with 56 percent of normal staff.
  • More than 44 percent of respondents do not have a plan in place to address supply disruption from China. Of those, a majority (23 percent of respondents) 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 are experiencing delays moving goods within China (48%).
  • Almost one-half (46%) report delays loading goods at Chinese ports.

Not Just Like the Flu™

Just Like the Flu™ comparisons looked ridiculous long ago, yet they still continue on Twitter.

Mike "Mish"Shedlock

Comments (17)
No. 1-8
mrutkaus
mrutkaus

The Internet doesn't stay up all by itself.

Tony Bennett
Tony Bennett

When someone very well known contracts - and dies - from virus, panic will hit 11 on the amp.

RayLopez
RayLopez

Here in Greece we gentlemen and otherwise farmers ordered some agricultural equipment from Italy and were told all such shipments are on hold. The price of such equipment in inventory has also gone up. But fear not! It's not a recession until we have two quarters of negative growth and the NBER says so! And on the WHO front page it says: "Together for a healthier world" -Dr Tedros Adhanom Ghebreyesus, with no pandemic as of yesterday says the WHO. Wait, what? I hear the WHO just said Covid-19 is a pandemic? Oh, it's official now, we can panic!? Recession to follow...and DJ-30 to 20k then 10k, both buying points IMO for long term investors.

KidHorn
KidHorn

Might be a bright side to this. We give farmers lots of subsidies to make sure we have food no matter what. We should consider doing the same for medical necessities.

MiTurn
MiTurn

These short-term to mid-term disruptions with the supply line from China -- assuming they are not too stretched out -- will tell the fuller story of the covid-19 hit that China took. If things are humming by summer, great; if not, the entire story was not told.

Brother
Brother

You do realize this has been caused by over reporting and social media panic. It appears news media doesn't know when to shut it off. Obama had his viruses and they down played it and the media complied.

ZeeshanKhan
ZeeshanKhan

coronavirus spread is affecting air travel, bus service and <a href="https://ritewayhoustontowing.com/">towing company</a>

IsaacWells
IsaacWells

Companies should build flexibility into the production process by identifying these weak points in the chain and ensuring alternate suppliers are available at all times. Products should be designed so that parts that can be produced in multiple factories in multiple countries.



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