Evaluation Engineering - 8

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Measuring COVID-19's impact on the world's supply chains
While COVID-19 pummels the world's supply chains, groups
like the Institute of Supply Management (ISM) are trying to
wrap their arms around the short- and long-term impacts.
ISM looked specifically at the business and supply chain
impacts and found that nearly 75% of companies are already
reporting disruptions in some capacity due to coronavirusrelated transportation restrictions.
More than 80% believe their organizations will experience some impact because of COVID-19 disruptions. Of those
companies, ISM says that one in six (16%) report adjusting
revenue targets downward an average of 5.6% due to the
coronavirus.
"The story the data tells is that companies are faced with a
lengthy recovery to normal operations in the wake of the virus
outbreak," said ISM CEO Thomas W. Derry in a press release.
"For a majority of U.S. businesses," Derry continued, "lead
times have doubled, and that shortage is compounded by the
shortage of air and ocean freight options to move product to
the United States-even if they can get orders filled."

Tracking Key Procurement Trends
Breaking down the results of its survey, ISM says these key
trends emerged:
* 57% of firms noted longer lead times for Tier 1, Chinasourced components, with average lead times more than
doubling compared to the end of 2019.

EVALUATION ENGINEERING MAY/JUNE 2020

* Manufacturers in China report operating at 50% capacity
and with 56% of their normal staff numbers.
* Over 44% of respondents do not have a plan in place to
address supply disruption from China.
* Of those, 23% of companies report current disruptions.
* Of the companies expecting supply chain impacts, the
severity anticipated increases after the first quarter of
2020.
* Six in 10 (62%) respondents are experiencing delays in
receiving orders from China.
* More than half (53%) are having difficulty getting supply
chain information from China.
* Nearly one-half of companies surveyed are experiencing
delays moving goods within China (48%).
* Almost one-half (46%) report delays loading goods at
Chinese ports.

Stay Tuned for More
Conducted between Feb. 22 and March 5, ISM's survey was
based on 628 respondents largely representing U.S. manufacturing (52%) and non-manufacturing (48%) organizations,
81% of which have revenues of less than $10 billion (USD).
Respondent roles range from emerging practitioner (4%), to
chief procurement officer (6%), with 73% being experienced
practitioners, managers and directors in a supply chain management role.

Evaluation Engineering

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