Coronavirus: Its Effects On Supply Chains And The Product Design Industry
The new coronavirus (Covid-19) that is terrorizing the globe is rapidly spreading in many parts of the world. Over 170 thousand people have been infected in over 120 countries and more than 6500 people have died. While this human toll is certainly the most tragic cost of the disease, the fast-approaching economic impact is also beginning to draw attention.
We live in a world where most industries are heavily dependent on Asian manufactures. With the worldwide spread now and the raising of dead, the outbreak is a perfect example of the potential instability manufacturing around the world can be.
Reports on how the Covid-19 outbreak is affecting supply chains and disrupting manufacturing operations around the world are increasing daily. The activity of Chinese manufacturing plants has fallen in the past month and is expected to remain crippled in from its former self for months.
Some specialists even predict a potential reoccurrence of the virus in China once regular activities are reinstated.
Coronavirus Effect On All Industries
Stock prices are driven by corporate profits. The global economic slowdown due to the coronavirus is throwing off the market and stocks are plummeting. The virus and what might be even worse, the fear of the unknowns, is a huge contributor to the impact on so many industries around the world.
The Aviation and travel industries are the some of the first to be severely hurt. With tradeshows, sporting events and concerts canceled all over the world so to are advertisement and signage companies being hit high and low. The auto Industry and even housing markets are expected to unfold significant changes.
Giant companies such as Microsoft and General Electric have already announced their loses and effects on their sales due to the coronavirus. Apple declared that the company will most likely not meet their quarterly sales goals to the Covid-19 pandemic.
In parallel to these corporate giants, product design companies, such as Spark, have already been impacted. During Chinese New Year we face, product developers, a mini crisis every year. Fortunately an expected crisis. Thousands of factories close and millions of workers head home to rest and celebrate for up to two weeks. We always prepare ahead of time and plan accordingly knowing that there will be delays due to the celebrations of their new year. Somewhere around the end of January we order parts ahead of time, we advise our clients about the timelines we are faced with so they can make decisions based well in advance of the closures.
This year Covid-19 hit right before the Chinese New Year and orders to quarantine became mandatory. Factories were forced to remain closed until further notice and this is where product design firms were left scrambling to find suppliers in other places. Slowly some factories are reopening but if small product design companies were only relying on a few suppliers that may not be opening yet, they could be in a lot of trouble.
Covid-19’s Effect On The Global Economy
Regardless of the industry, Covid-19 will impact all industries and the global economy. The WHO declared the outbreak a pandemic and American markets recently had their worst day since 1987, governments are closing schools, the multiple sports associations suspended the remainder of their seasons, Disney announce the closure of all of their parks, and many cultural events have been canceled. Music concerts, art festivals and tradeshows have been postponed. This could impact the business world for months, if not years.
The Covid-19 outbreak is disintegrating workforces, affecting supply chains, and weakening demand, making it more expensive for businesses to operate and harder to sell their products. Some businesses are telling their employees to work from home and developing plans to continue operating during these difficult moments.
The virus is discouraging consumers to go out to restaurants, large gatherings or retail stores. During these critical crisis’s it’s natural adapt and be creative in order to survive. Among all the negative outcomes there will always be some positive and successful strategies implemented that will remain after the crises that will allow, even smaller business to grow.
The unknown is the biggest fear trigger here and hopeful companies are predicting and postponing their normal activities until June. We will continue to keep a close eye on further developments and work towards continuing to deliver the best product design to our clients.