Boston Consulting Group (BCG) assesses COVID-19’s impact to supply chains, identifying two possible scenarios leaders need to consider, along with actions they can take to reduce their risk and deal with disruptions

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Responding to the Coronavirus' Impact on Supply Chains

Responding to Supply Chain Disruptions – Boston Consulting Group (BCG) assesses COVID-19's impact to supply chains, identifying two possible scenarios leaders need to consider, along with actions they can take to reduce their risk and deal with disruptions

Summary:

Boston Consulting Group (BCG) published article on March 9, 2020 regarding impact of COVID-19 to supply chains, and what companies can do in response. Summary points include:
  • COVID-19 Impact to Supply Chain – Containment measures in parts of China closed manufacturing plants and restricted flow of materials, components, and assembly in affected regions, disrupting global supply chains relying on China and other parts of world where outbreak has spread, like South Korea and Italy
  • Two Possible Scenarios – Leaders need to prepare for two scenarios for COVID-19: a limited regional impact with months of containment creating shortages in inventories, supply, demand and capacity; and more widespread global impact up to end of 2020 that could mean closures, transport/logistics disruptions, cash flow crisis, and potential bankruptcies
  • Immediate Actions – Assess and analyze SKUs and inputs at risk, stock essential inventory, connect to suppliers and find backups for key components, reroute transportation in affected places, and ensure demand is managed and optimized
  • Recommended for Next Weeks – Assess future demand to adjust capacity and source possibly from other geographies, make contingencies for potential shutdowns or transport restrictions, and add transport/logistics modes
  • Long-Term Response – Apply scenario modeling for changing operating conditions and disruptions, monitor inventory through supply chain map of components and sources, differentiate how inventory is held, and understand impact of black swan events
The free article published at LinkedIn Pulse can be found at https://www.linkedin.com/pulse/responding-coronaviruss-impact-supply-chains-ben-aylor/
Company: Boston Consulting Group (BCG)
Category: Supply chains

Original publication date: March 9, 2020

Date last updated: April 15, 2020