Nearly 80% of manufacturers expect coronavirus will damage their operations

Coronavirus and manufacturing
By David Gee

The National Association of Manufacturers released a survey today of its member companies on the impact of the COVID-19 outbreak to manufacturers. The survey was conducted in the field from Feb. 28 to March 9. The 558 respondents were asked about effects to their supply chain and operations, their financial expectations and their emergency response plans.

More than 78% say that uncertainty around the COVID-19 outbreak is likely to have a (negative) financial impact on their businesses.

More than 53% of manufacturing firms anticipate a change in their operations in the coming months.

A litle over 35% of respondents say they are facing supply chain disruptions.

Respondents were split between having an emergency response at their company (50.8%) and not (49.2%).

Respondents were also asked in an open-ended question about the resources that would help them prepare. They generally cited five types of needed resources:

• Nonpolitical and non-sensationalized information, particularly company-specific

• Clear and timely updates on new restrictions and health advisories

• Information about how other companies are responding

• Clear guidelines and protocols from the Centers for Disease Control and Prevention and National Institutes of Health

• Quick and early detection resources

When commenting on supply chain disruptions, respondents noted issues with parts arriving late and delivering to customers late as a result. While some say these disruptions are “manageable at this point,” they do create “some additional costs.”

Many mentioned having to find “alternative suppliers,” and while disruptions are characterized as “minor now,” they are expected to become more serious “if slowdowns continue beyond next quarter.”

When discussing operations, respondents are anticipating slowdowns and “reduced customer demand.”

Other responses mentioned “evaluating work schedules and inventory levels,” fielding “work from home requests” and implementing “business continuity” response plans that include curtailed travel, workplace sanitation, restricted face-to-face interactions and “staggered shifts on the shop floor to help compensate for higher-than-normal absences.”

On emergency response plans, respondents noted restricting external visitors, “fine-tuning” existing continuity plans and offering a “more lenient leave policy.”

Others replied they do not yet have an emergency response plan but are working on developing one.

Respondents also mentioned providing regular updates from the CDC.

One respondent highlighted the worst-case scenario: “If the virus hits our employees, we will need to shut down. That would be catastrophic to our business.”

“Already, manufacturers are grappling with disruptions to their businesses due to the COVID-19 outbreak, with many anticipating financial and operational consequences — even before some of the developments of this week,” said NAM president and CEO Jay Timmons.

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