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Update: The Coronavirus Outbreak and the Global Supply Chain

admin | 7 March, 2020

There are numerous reports of disruptions to the global supply chain as a result of the coronavirus outbreak. Noticeably hard hit sectors include technology, automotive, and consumer retail. With China making up a sixth of the global economy and serving as the single largest hub in the global supply chain, the impact of this outbreak cannot be understated. As a result, companies will have to rethink many of their sourcing strategies and possibly seek out new partners to meet the demands of their businesses: one of the best ways to ensure this is done smoothly is to cooperate with a reliable third party inspection company on the ground.

It is obvious that businesses sourcing from, as well as exporting to China have been strongly affected by the coronavirus outbreak. South Korean automotive giant Hyundai has recently announced that it will cease production at its facilities in the next few days as a result of being unable to receive parts from its Chinese partners. Furthermore Apple has temporarily closed all of its retail locations in Mainland China, its third largest consumer market. However, there are signs that this disruption could soon abate: work is set to recommence in most Chinese provinces by February 10 and Taiwan’s Foxconn Corporation, who manufacturers consumer goods for Apple among others, expects to return to full production capacity by late February. Overall, the World Health Organization (WHO) has praised China’s efforts to contain the spread of the coronavirus.

Despite positive signs from China, some businesses must meet their sourcing needs without disruption. Reports from markets such as Vietnam, Bangladesh, and India have shown positive signs for domestic textile, footwear, and toy manufacturers, who have seen an increase in orders since the coronavirus outbreak. However, entering into supplier relationships in new markets is always a challenge: businesses should exercise caution when doing so.

CENENI is ready to provide support to companies dealing with this ongoing crisis. Our services include supplier audits, testing, and pre-shipping inspection services. CENENI can help your business navigate the challenging circumstances associated with major market disruptions. For more information, please contact us today.

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