The Impact of COVID-19 on Global Supply Chains with ISM CEO | Tom Derry
Hidden Forces
Demetri Kofinas
4.8 • 1.6K Ratings
🗓️ 9 April 2020
⏱️ 55 minutes
🧾️ Download transcript
Summary
In Episode 132 of Hidden Forces, Demetri Kofinas speaks with Tom Derry, CEO of the Institute for Supply Management and publisher of the market-moving ISM Manufacturing Index about the impact of COVID-19 on global supply chains. This is a deep-dive into how the intricate world of just-in-time manufacturing, outsourcing, and globalization has been impacted by the world-wide disruptions caused by the novel coronavirus.
In recent years, global supply chains have been in the process of a fundamental shift, in part to strengthen their immune systems to mitigate the risk of multiple threats — unprecedented trade turbulence, as well as economic uncertainty, geopolitical events and rising labor costs. COVID-19 (novel coronavirus) has provided a severe new test to these global supply chains. Since its genesis in the manufacturing hub of Wuhan, China, in December, the outbreak has resulted in more than one million documented cases and nearly sixty thousand deaths worldwide, quarantined workers, temporarily shuttered factories, canceled high-profile events, shaken markets and handcuffed supply management organizations at many companies. The gravity of the situation was exemplified in a survey by Institute for Supply Management, which found that nearly three-fourths (72%) of U.S. companies have experienced supply chain disruptions due to coronavirus-related transportation restrictions, and 81% of organizations expect their procurement operations to be impacted by COVID-19. For some of those companies, the infection goes beyond the supply chain, as 16% of survey respondents report lowering annual revenue targets by an average of 5.6%. More than half (53%) of the 628 respondents in ISM's recent survey said their companies are having trouble getting supply chain information from China.
You can access the episode overtime, as well as the transcript and rundown to this week's episode through the Hidden Forces Patreon Page. All subscribers gain access to our overtime feed, which can be easily added to your favorite podcast application.
Transcript
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| 0:00.0 | Today's episode of Hidden Forces is made possible by listeners like you. |
| 0:04.4 | For more information about this week's episode or for easy access to related programming |
| 0:09.7 | visit our website at hidden Forces. I.O. and subscribe to our free email list. |
| 0:16.4 | If you listen to the show on your Apple Podcast app, remember, you can give us a review. |
| 0:21.5 | Each review helps more people find the show and join our |
| 0:24.9 | amazing community. And with that, please enjoy this week's episode. And the What's up everybody? My guest today is Tom Dairy, CEO of the Institute for Supply Management, |
| 0:56.0 | which puts out the market-moving PMI number on the first business day of every month. |
| 1:02.0 | As CEO of ISM, Tom has a unique vantage point, observing |
| 1:07.4 | major macroeconomic trends and developments through his daily contact with Fortune 500 companies, government agencies, |
| 1:16.2 | and NGOs in the United States and abroad. |
| 1:20.7 | This was super educational for me, not just my conversation with Tom, including everything |
| 1:28.0 | we discussed in the overtime, but also all of the work I put in preparing for it, and what I learned about the evolution |
| 1:36.4 | of global supply chain networks over the decades, from the development of just in time manufacturing to low-cost sourcing, automation and logistics, |
| 1:46.8 | the underbelly of this iceberg that makes up global trade and commerce, all the things we consume and rely on every day that |
| 1:56.9 | come to us through this complex interconnected web of processes and relationships that we cannot help but take for granted. |
| 2:06.2 | And yet we are learning through this recent crisis and the impact of COVID-19 about just how critical and in some cases fragile these supply chains and |
| 2:17.3 | networks are and can be. |
| 2:20.8 | In the overtime, Tom and I discuss a number of additional sectors including services like travel, restaurants and hospitality, automotive telecommunications, construction and warehousing, but the most interesting part deals with the long-term |
| 2:36.8 | impacts to these global networks, due not only to COVID-19, but the larger forces of mercantilism, retrenchment, and disorder that we've talked |
| 2:47.6 | about on prior episodes and which are rerouting supply chains closer to home, reducing choke points and vulnerabilities that we've seen |
| 2:56.4 | revealed by this latest global crisis. |
| 3:00.0 | We also discuss the possible threat of inflation seeping into these networks and how this could |
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