Organizations involved in production, manufacturing and distribution are navigating unchartered territory in the current economic landscape. COVID-19 is causing significant disruptions in global supply chains due to concerns around worker safety as well as issues in obtaining critical parts and raw materials. As the virus continues to impact global economic activity, companies will depend on the effectiveness of containment and mitigation efforts in the countries where their goods are produced, manufactured, and distributed.
Global Competition for Manufacturing Investment
Nathan Resnick, Co-Founder and CEO of Sourcify, appeared on CNBC’s ‘The Exchange’ on Wednesday, May 13th to talk about recent trends in the manufacturing industry where companies that had transitioned their production out of China due to the tariffs and trade disputes are now moving back. This can be attributed to China’s manufacturing capacity picking up, as a result of successful containment and mitigation efforts, while production is slowing in countries such as India and Vietnam.
Companies who rely on overseas production find themselves balancing uncertainty in consumer sentiment (of having their products made in China) with capacity and logistical challenges of having their products made in other countries that are not effectively controlling the spread of the virus. While the long-term impact is yet to be determined, countries that do a better job of curbing the spread of COVID-19 and keeping their operations up and running have a strong advantage in attracting foreign investment.
Evaluating Your Supply Chain
Just as countries are competing with one another, manufacturers are also engaged in a fierce competition to demonstrate that they can still effectively produce and deliver their goods to the market in a timely manner.
In these uncertain times, customers and business partners want assurance that your organization’s supply chain is still operating effectively. Independent evaluations, such as the AICPA SOC for Supply Chain assessment, can provide an unbiased, third-party evaluation on the effectiveness of your system of controls in achieving operational objectives. Among these controls are those that are designed to manage the ever-evolving supply chain risks, such as COVID-19.
Your Supply Chain Assurance Partner
For more information on the SOC for Supply Chain assessment or for guidance on how to enhance the operational effectiveness of your manufacturing process, please contact Boulay’s Risk Advisory Services team.