Coronavirus Update: Companies Address Impact on Supply Chain

The impact of the novel coronavirus-otherwise known as COVID-19-has largely been limited to China in terms of the number of people who have died from the illness. However, the latter part of last week made it clear that the virus is causing a severe disruption throughout the global financial markets, as Wall Street suffered its worst losses since the beginning of the Great Recession more than a decade ago.

Many companies in the sign, graphics and printing worlds have ties to China, and some have issued statements trying to reassure their customers and investors that they are taking steps to address the issue.

Schaumburg, Illinois-based ink manufacturer INX International, which has four locations in China, according to its website, says in a statement it is “working hard to insure that the supply of their products to customers remain constant and secure while they manage through the global COVID-19 coronavirus situation.

“‘We are very cognizant of the impact we have on the overall supply chain,’” says John Hrdlick, President and CEO of INX International. “‘Thanks to our vendors, INX manufacturing facilities are adequately stocked with raw materials and based on communications with them, we expect the supply from China to resume well before we have inventory concerns. We will continue to keep our customers updated during this process and are committed to making sure supply disruptions are minimized.

“‘Our hearts,’” he continues, “‘go out to everyone around the globe who have been negatively impacted by this outbreak in so many ways, including the loss of family and friends. We are keeping them in our thoughts and are hopeful COVID-19 runs its course as soon as possible.’”

Japan-based Konica Minolta Inc., which has its U.S. headquarters in New Jersey, serves a variety of markets around the globe, including the signage industry with its wide-format printers. It says it is recommending employees at its Japanese facility work remotely from home if possible, and if they go come into work to commute during off-peak hours. It is also recommending that meetings that include multiple people instead be replaced by call or video conferencing.

“Though Konica Minolta has no development or production facilities in Wuhan (where coronavirus initiated), it has a sales and services branch for business technologies and measuring instruments there,” the company says in a statement.

After a period of closure mandated by the Chinese government, all of its other Chinese facilities have been re-opened, the company says, except for the one in Wuhan.

Konica Minolta also says that it has donated eight of its ultrasound diagnostic devices to six hospitals in Wuhan. The devices are being used in the hospitals’ intensive care units to assist in closely monitoring severely ill patients.

CNBC is reporting that several companies have issued warnings accompanying their quarterly earnings reports about how their supply chains may be disrupted due to the spread of the virus.

HP Inc.‘s bottom line will take a hit this quarter due to the coronavirus epidemic, CEO Enrique Lores told CNBC.

“We produce most of our products in China,” says Lores.

Other companies are raising similar concerns, according to Allee Bruce, digital content editor for SDG sister publication Printwear.

As Bruce notes in her report, “Israel-based textile printer manufacturer Kornit Digital says in its recent fourth-quarter earnings call that the company is closely watching the situation in China.

“Kornit has two offices in the region, one in Hong Kong and one in Shanghai. The company also has five distributors located in the country.

“‘While China is a future growth opportunity for us, its contribution to our current and near-term business remains immaterial,’” says CEO Ronen Samuel. “‘As it comes to our ability to deliver products, none of our products are manufactured in China, and our only supply chain dependency is in the area of certain raw material and dryers.’”

Bruce reports that Sioux Falls, South Dakota-based JDS Industries, a supplier of components to the sign and graphics, sublimation, awards, and gifts and promotion markets, has sent out an email to its customers: “‘While we do not have any factories in that area (Wuhan) that do production for JDS, it still has an effect due to many employees of our factories that are from that area and can now not come back to work since they are in lockdown mode there. We have already lost at least two weeks of production in most factories and expect to lose a full month in many others. In addition to that, when the factories can get back to work, most will only be operating at half of their normal capacity until things improve with the spread of the virus, and more of their workers can come back. This is going to cause delays on nearly anything produced in China, as well as any new products that were not shipped before (the) Chinese New Year.’”

“The wholesale supplier says it carries extensive inventories, so it does not anticipate running out of items. However, if circumstances don’t improve over the next two months, JDS says it will see more significant effects on product availability.

“The e-mail closes, stating, “‘We will be working with our vendors very closely and monitoring this situation and trying our best to keep up with delays in our computer systems as our vendors update us.’”