Coronavirus Impact on Supply Chains & Implications: 5/28/20

Today’s webinar began with a geo-political overview of supply chain and development issues across Eurasia. We began with the Mekong Infrastructure Tracker, a public online platform. The tool is a transparency attack on disinformation, particularly from China, in a region where energy-related projects dominate the landscape. We turned to supply chains across eastern Eurasia into eastern and western Europe, noting attempts by several states to preclude dependence on Russia-provided energy sources. Noting the need for reliable information during the COVID-19 pandemic complicated by dis-, mis- and mal-information, we turned to the attached COVID-19 case and impact on businesses.

The ensuing discussion, moderated by Jennifer Kurtz from Manufacturers Edge and Jim Lacey and Tom Drohan from JMark Services, revolved around the case’s three questions. Elements of the discussion that pertain to each are captured below:   

1. What difficulties or challenges are you having?
   
   Based on two surveys conducted in April by Manufacturers Edge, companies in the aerospace and defense supply chain have experienced increased demand and orders. At the same time they struggle to increase production capacity in light of protective personal equipment (PPE) requirements. Nearly 3/4 experienced no layoffs. Many defense related businesses have seen an uptick on orders. Challenges include supplier delays and customer-canceled orders. Getting accurate information in light of fake certificates and claimed standards (is this really N95?) standards reinforces “buyer beware” awareness. When to switch to new markets (medical, remote workers) depends on how incremental or dramatic the changes are for your worker skills, equipment capabilities, and governmental policy changes that affect incentives to adjust. How to onshore components from available suppliers — where to get this information? How to redefine what is a critical product during the pandemic.
   
2. What do you anticipate will happen?
   
   Forecasting market demand is problematic during this pandemic. A surge in cyber attacks is a strong trend as malicious actors exploit fears and uncertainty of the pandemic. Sourcing from China is on the decline but how much is uncertain. Government policies may incentivize this. Tracking global trends and imagining the impact on local businesses increases our incentives to warehouse critical components. What kind of recovery shape – U, W, etc. – will occur state by state and nationally? It’s uneven right now as flattening the curve efforts continue in different ways. Compare that estimate to when a vaccine is available—no consensus on this. How to plan for hiring workers if US passes laws that mandate hiring US citizens over highly skilled and educated foreigners? The integration of Eurasia is outpacing integration in the Americas—how can we shorten supply chains and compete?
    
3. What are you going to do about them?
    
   Nearly 20% of surveyed small businesses in Colorado have pivoted production lines (canvas to PPE, for instance) and sought new markets. Attendant challenges are how to identify and access new customers. Purchasing new equipment sometimes occurs before an adequate market analysis can be done. The state of Colorado COVID website provides practical information on where to find PPE, how to create a safe environment for workers (checklists), and how to work from home and communicate outside the office while protecting proprietary information. Increasing inventory in available warehouses along reliable distribution routes and specifying the standards for alternate suppliers are necessary. There is an awareness of how important NIST and CMMC standards are to protecting businesses against the COVID surge in cyber attacks.
   
   Next webinar: Business Continuity and Web-based Technologies