Page 3 - Coronavirus Pandemic by Elias Amash

major stir in the supply chain. Also, two huge General Motors companies in the US are facing

production blackouts as China-made parts at its Michigan and Texas plants are running low, the
8
Wall Street Journal reported .

Ford Motors claim that its joint ventures in China, Changan Ford and JMC, started resuming

production a month ago but still needed more time to go back to normal. “We are presently

working with our supplier partners, some of whom are located in Hubei province to assess and

plan for parts supply to support current parts needs for production,” said Ford spokeswoman
Wendy Guo.

What are the Solutions?

Industries that have commercial contracts that have been affected by the spread of

coronavirus, should consider taking the following measures:

• Recognize which of the products and facilities along with Tier 1 and Tier 2 suppliers are

in locations affected by the coronavirus

• Develop a company-wide approach for responding to force majeure claims

• Explore potential alternative sourcing and shipping options that may allow companies to
meet contractual obligations, even if they are more expensive

• Find alternative manufacturers in countries that have not been affected that bad

• Coordinate sourcing efforts among business units

• Organize regular meetings with customers and suppliers to discuss rapidly changing
circumstances

• Place larger orders now to ensure you have what you need

• In order to prepare for future risks, update form contract force majeure clauses to

account for modern risks to performance, such as disease outbreaks

• Find a local distributor that has inventory on hand and lock that in as soon as possible

8 https://www.wsj.com/articles/coronavirus-outbreak-could-affect-production-at-2-gm-plants-union-officials-say-
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