NORTHEAST WISCONSIN, WI (WTAQ-WLUK) – The coronavirus is already hurting the world economy, but the economic impact is now also starting to have a ripple effect closer to home.
We may not always realize just how many products we use everyday come from China until there’s a crisis.
Dr. Jason Woldt, University of Wisconsin-Oshkosh assistant professor of supply chain management, tells FOX 11….
“The coronavirus is what we refer to as a black swan event, which is a low probability, high-impact event.”
And the products stop coming.
“Just recently, we were trying to get a product in for one of our customers, and we promised them it would show up on a certain day…it didn’t show up,” said Patrick Murray, Owner of Murray Photo & Video.
He tells FOX 11 a huge chunk of the merchandise at Murray Photo & Video is shipped from overseas.
“Oh, just about everything does these days.”
But Murray never pictured his small business would feel the impact of the coronavirus.
“No, we didn’t think it would affect us.”
Until it did.
“Finally, by the third day we got the product and we later found out it was held up through shipping, because of the virus that they were checking some places for that virus.”
Costing Murray valuable time and money.
“Because it was late, I got in my car and drove it to our customer an hour and a half away to get it in his hands.”
From camera to game shops, businesses relying on Chinese products aren’t sure when they’ll get them, or if they’ll get them.
Patrick Fuge, owner of Gnome Games, tells FOX 11…
“Products that we would’ve expected to be here in March and April are now being delayed two weeks to a month, and products that were supposed to be here in late April to May, and we fully expect to see some that were announced to not even make it at all.”
With about 75% of its products coming from China, it’s no surprise that businesses like Gnome Games are feeling the impact of the coronavirus.
Fuge says coronavirus is the hot topic at the International Toy Fair in New York.
“What we’re doing is we’re looking at our supply chains – it’s why we were out at the Toy Fair – and trying to make those a little bit more diverse, so we’re buying more games from Europe, more games that are manufactured in the United States.”
In crises like this, the thought may be to hoard or over order on products to avoid wait times, but Woldt says that may not be the answer.
“That causes a number of different problems, particularly the bull-whip effect in any supply chain, you know, then you’re in a position of excess inventory, and any firm would then need to liquidate that inventory, at some point.”
Woldt says businesses that don’t panic could turn a problem into a plus.
“This is a good opportunity to leverage with their customers and with their downstream supply chains; how they’re positioned better than some of their competitors.”
Local manufacturer Oshkosh Corporation says its also figuring out just how much of a factor coronavirus will play in its business.
