In an initial update posting on Monday, I sounded a call to supply chain risk management teams to begin preparations for any consequences related to the ongoing swine flu outbreak.  As I pen this posting on the evening of April 29, the World Health Organization (WHO) has warned that a swine flu pandemic is imminent.  The Geneva based WHO raised the official alert level to phase 5, the last step before an actual pandemic. The death toll within Mexico has risen to 159, and one infant has died in the U.S. of more concern, both U.S. and EU officials anticipate further deaths attributed to this outbreak.

From a supply chain perspective, certain observations can be made.  First, it’s becoming rather obvious that the virus is spreading as a result of contact among persons. As both the threat level and infected populations continue to increase, I believe we should anticipate more forms of travel restrictions, as countries will surely step-up efforts to protect their populations.  A video story featured by the Reuters News Service shows how the government of Japan has already escalated its response to incoming flights from Mexico.  Transportation across supply chains will be subject to interruptions, as carriers get tangled in these cross-border restrictions, similar to what occurred during the SARS outbreak in Asia.

Other industry-related supply chain impacts are still emerging.  An article in siliconvalley.com outlines the extra precautions that certain high-tech and consumer electronic companies are currently taking.  A major high tech contract manufacturing center is located in the Guadalajara Mexico area with the presence of firms such as Flextronics, Sanmina/SCI, and other manufacturers.  There are also concentrations of automotive assembly and parts suppliers concentrated near the Mexican and U.S. border.  The situation right now is reported as precautionary, with restricted travel directives, and close monitoring of the overall situation.

Finally, as the saying goes, crisis does bring opportunity.  Manufacturers of protective masks, cleaning materials, and antiviral drugs are experiencing a rather positive effect from this crisis, as demand for these products explodes beyond normal levels.

Continue to stay informed on current developments and be prepared to act on all supply chain fronts.

If you would like to share observations of what precautions your organization has undertaken as a result of this potential pandemic, please share them in the comments section related to this post.

Bob Ferrari