The aftereffects of the coronavirus epidemic are becoming more and more evident with every passing day. The supply chain industry is one of the worst affected sectors. We present you with the specifics of how big the impact is.

1. Coronavirus cripples Global Supply Chain
Date: 11th
Feb., 2020 | Version V1.0
End-to-End LogisticsInnovation Partner
www.dilx.co

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The aftereffectsof the coronavirusepidemicare becomingmore andmore evident with every passing day.
The supplychainindustryisone of the worstaffectedsectors.We presentyou withthe specificsof how big
the impact is.
Expected GDP drop
Chinese isone of the biggestproductionhubsinthe world.China’ssheerprowessinthe manufacturingand
supplychaincan be estimatedfromthe factthat the Asian nation alone contributed 39% in the global GDP
of 2019.

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Impact on Global Supply Chain
Recentlyinaninterview withFreightWaves,economist Paul Bingham,directorof transportation consulting
at IHS Markit talkedaboutthe ongoingandpotential effectsof the virus that is slowly traveling around the
globe.
On being asked about the state of supply chain managers in the region and the impact of the shutdown,
Paul says, “What’shappening isthatthe gap you managed againstisnow extended. If these factories don’t
restart or if they restart and then they run out of parts [due to issues with first-tier suppliers], how quickly
that trickles down will depend on how tightly supply chains are being managed in terms of lead times and
bufferstocks.But I think that it will be less than a month before you’d start to see evidence of disruptions.”
Effect on foreignmanufacturers
The conditions prevailing in the Chinese subcontinent have put a question mark on the operations of
foreignorganizationsaswell.Bothdomestic and international supply chain routes in the region are facing
increased restrictions with every passing day as the virus spreads further.
Impact on the automotive supply chain
Carmakers,suppliers,andlogisticsprovidersare prioritizingtheiremployee healthandsafety.Initiatives
have startedto getthe ex-patsemployeesoutof China.Groupe PSA withthe Frenchgovernment’ssupport
isflyingworkersandtheirfamiliesbacktoFrance while Nissanhasalsotakensimilaractionbyflyingseveral
expatriate workersandtheirfamiliesbacktoJapan.
Ford iskeepinganeye onthe situationandwouldactaccordingly “The situation is dynamicand evolving
daily,” “Asof [Wednesday 29 January] Ford China hasextended theChineseNew Yearholiday by two days
through February 2and deferred the resumption of production atourCAF[Changan Ford Automobile] and
Jiangling Motors[JMC] jointventureplantsto February 10 aswell,” saida spokespersonforthe company.
Accordingto DHL Resilience360, DHL’s supplychainriskassessmentservice,Outof all manufacturingin
Wuhan,50% isrelatedtothe automotive industry.Inboundandoutboundaircargoshipments,trucking
and rail cargo serviceshave reportedseveral disruptionsalongwithheavyportcongestionforvesselsalong
the Yangtze Rivernear Wuhan. “The regionallockdown hasalready severely impeded logistics operations
thatrely on accessto highwaysto carry goodsinto and outof theregion,” saidthe companyina statement.
Conclusion
As perthe industryanalystIHSMarkit, productionlossesforthe firstquarterdue tothe crisisare expected
to hitaround 350,000 units(-7%) if the plantsstaycloseduntil February10.
If the manufacturingplantsdonotresume operationtillmid-March,anation-wide supplychaindisruption
isexpected.The potential lossinproductionisestimatedtobe more than 1.7m unitsjustfor the first
quarterwhichis32.3% lessthanthe marketexpectations.

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