Lengthy Recovery to Normal Operations

The lead image is from Axios. The ISM has more details.

Please consider the ISM report COVID-19 SURVEY: IMPACTS ON GLOBAL SUPPLY CHAINS.

Nearly 75 percent of companies report supply chain disruptions in some capacity due to coronavirus-related transportation restrictions, and more than 80 percent believe that their organization will experience some impact because of COVID-19 disruptions. Of those, one in six (16%) companies report adjusting revenue targets downward an average of 5.6 percent 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 Thomas W. Derry, Chief Executive Officer of ISM. “For a majority of U.S. businesses, 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.”

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Key Points

  • 57 percent noted longer lead times for tier-1 China-sourced components, with average lead times more than doubling compared to the end of 2019.
  • Manufacturers in China report operating at 50 percent capacity with 56 percent of normal staff.
  • More than 44 percent of respondents do not have a plan in place to address supply disruption from China. Of those, a majority (23 percent of respondents) 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 are experiencing delays moving goods within China (48%).
  • Almost one-half (46%) report delays loading goods at Chinese ports.

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