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Steps to Prevent Coronavirus from Disrupting your Global Supply Chain

By Avetta Marketing
March 13, 2020
5 minutes
Steps to Prevent Coronavirus from Disrupting your Global Supply Chain

In 2003, China’s economic growth fell three percentage points from – 8% year-on-year to 5% year-on-year. This was largely attributed to what became known as the SARS outbreak, a respiratory virus that infected over 8,000 people and killed 774. 

17 years later, businesses are facing a similar dilemma. An outbreak of COVID-19 is sending ripples across the contractor and industrial landscape. Unfortunately, according to current numbers, the new strain of the coronavirus might have an even bigger impact than the SARS-CoV outbreak. 

It took the SARS outbreak more than six months to infect 5,000 people in mainland China. COVID-19 had reached that number in less than a month. Since then it has continued to spread, reaching every continent (excluding Antarctica) in two months. 

The Business Impact of Coronavirus 

But it’s not just the rate at which COVID-19 outbreak is spreading that is worrying for the global economy. A comparison of China’s position as an economic hub between 2003 and the present paints an even grimmer picture. In 2003, when the SARS-CoV broke out, China’s GDP was USD 1.6 trillion. In 2018, China’s GDP stood at USD 13.6 trillion. China’s export volumes have grown as well from USD 438 billion in 2003 to USD 2.5 trillion in 2018.

Regardless of whether businesses have operations in affected regions, there are going to be repercussions of the COVID-19 felt across industries. Restrictions on travel and absenteeism within vendors and suppliers could cause massive supply chain disruptions worldwide. That said, companies with significant portions of operations in China are at particular risk of upheaval.

Whitepaper: Steps to Prevent Coronavirus from Disrupting your Global Supply Chain




How to Prepare for Unexpected Changes

Organizations need to take precautionary measures in order to ensure business continuity during the fallout.

According to a recent independent interview with 20 EHS leaders, more than 40% stated that they are stopping work in the affected area. Another report found that many businesses are contemplating removing their supply chain networks out of China indefinitely. 

This supply chain uncertainty is part of the reason why almost USD 100 billion was estimated as lost revenue during the  outbreak. To avoid a similar fate, businesses need to adapt and stay ahead of the rapidly progressing disease. 

One of the most significant things organizations can do is to establish a comprehensive and conducive business continuity plan (BCP) and determine the degree of organizational preparedness to deal with the global COVID-19 outbreak. This includes:

  • Reviewing company policies on communicable diseases
  • Monitoring internal and external communication measures
  • Conducting thorough online and off-line training and simulation drills

Some organizations found that creating an emergency task force to monitor and communicate health and safety processes, allow them to adapt as quickly as the virus might. Further, it helps companies to keep employees updated on the local scenario and business processes so there are no questions on who should be traveling or coming into work. 

Best Practices Concerning Ongoing Operations

One such task force was able to communicate the following best practices to their employees, successfully maintaining operations and eliminating project delays. 

  • Replace face-to-face meetings with video conferences
  • Permit staff to work from home
  • Implement a 14-day self-quarantine period for employees that have traveled to infected areas
  • Apply the same restrictions among suppliers and temporary workers as you do full-time employees
  • In heavily impacted areas, conduct temperature scans before allowing entry to work. All workers should wear the necessary PPE

If someone on-site is suspected to be infected that staff member should leave the office immediately and visit the doctor. Before returning to work they need a "cleared to work" form by a medical professional. Also, please note if someone is showing symptoms they may be detained while crossing borders.

Learn about these and many other best practices for how to deal with COVID-19 in our recent report, Supply Chain Lessons Learned from The Coronavirus and SARS Outbreaks. This white paper contains actionable insights from leading organizations on how they are responding to the crisis. 

Securing Your Supply Chain with Avetta

In addition to developing a strong BCP plan, businesses can also find success in diversifying their contractor base. 

With Avetta’s network of over 95,000 suppliers, clients are able to quickly find and vet contractors outside of infected areas. This allows businesses to avoid delays while maintaining a safe work environment. 

This practice of diversifying your base will help businesses overcome many localized issues that may come up, from inclement weather to viral outbreaks. Contact us to learn more about our strong global network.

For more information about Avetta's Contractor Management software, Contractor Prequalification or Supply Chain Risk Management, visit, email [email protected] or call 844.633.3801.

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