Covid -19 has a far- reaching impact on world health, but however the effects on the global supply chain and financial markets is significant enough to already begin triggering economic repercussions that could last well into the 2020’s.
Why? For all the most obvious of lean management and labour reasons that supports long term Manufacturing and Supply Chain globalisation strategies (outsourcing, offshoring, outsourcing etc etc). Thousands of macro and micro global business entities over the last twenty odd years, have come to heavily rely on the emerging superpower that is current China, for cheap mass manufacturing output, or conversely, as a consumer for its own products.
Consequently, China has become a leading global supply influencer and equally, an important consumer market to the world, resulting in the country having enormous magnitude to influence world GDP.
As such, and considering it is the epicentre of Covid-19 (coupled with the resultant labour and consumer fallout factors) the immediate and long term knock on effects of the virus is going to impact thru all disciplines of the Supply (and Logistics) Chain, the Global Market Place and resultantly, the world economy for several months, if not for a lot longer, in varied but associated ways.
As a very specific local example, South Africa exports a massive percentage of its luxury market orientated coastal fishing catch to the Chinese consumer market. It has become largely dependent on that market, over the last few decades, without properly exploring other potential markets. This industry is now experiencing a sudden and decided market downturn due to China’s now shrinking high end seafood market, because of Covid 19 quarantine implications on logistics and social activities and patterns within China.
Maybe the old strategic maxim of ‘never relying on a single supply or sales source is about to once again prove its wisdom and validity?