Companies are trying to assess the impacts of the coronavirus, COVID-19, but we are still in uncharted waters.
“Corporate executives are largely working blind because the coronavirus could cause supply-chain disruptions that are unlike anything we have seen in the past 70 years,” according to The Wall Street Journal.
“For now, the best course of action for companies is to analyze possible outcomes in the context of known supply-chain risks based on historical precedents, and to take precautionary measures that minimize exposure to future disruptions.”
For example, Apple has already given warnings that the coronavirus will affect results.
“The iPhone maker, which is highly dependent on Chinese factories and Chinese consumers, said in a statement that its supply of smartphones would be hampered because production was ramping up more slowly than expected as China reopened its factories. Apple also said that demand for its devices in China had been hurt by the outbreak; it closed all 42 of its stores in the country last month and most have yet to reopen,” according to the New York Times.
“One of the problems is how are you going to make up lost production. Once things start to go back to normal, we’re probably going to see a lot of overtime. But right now the uncertainty is probably driving people crazy,” said Willy Shih, an expert on Asian industrial competitiveness and the Robert and Jane Cizik Professor of Management Practice at the Harvard Business School.