Companies in Richardson and beyond brace for potential inventory shortage amid coronavirus outbreak

The coronavirus has caused a disruption in the supply chain that has a ripple effect on various industries. (Courtesy Adobe Stock)
The coronavirus has caused a disruption in the supply chain that has a ripple effect on various industries. (Courtesy Adobe Stock)

The coronavirus has caused a disruption in the supply chain that has a ripple effect on various industries. (Courtesy Adobe Stock)

Editor's note: This is an evolving story. If you own a business that has been affected by the coronavirus and would like to tell your story, please email [email protected]

Richardson businesses that rely on China and other countries for inventory are scrambling to ensure production stays on track as the coronavirus continues to spread worldwide.

Some offshore factories are still shut down, while others are just coming back online. This has slowed production and transit of items, particularly from China to the U.S., said Lawrence P. Howorth, director of the city of Richardson’s Mayor’s Office of International Business.

“Some [plants] have reduced production, so it’s taking longer to get their products,” he said.

It is too early to quantify the revenue impact in Richardson because many companies are still operating on their existing inventory, Howorth said.

“They all have some inventory, but they are starting to get a little thin,” he said.

Companies are also beginning to rethink their supply chains by looking to countries such as Mexico or other areas in South Asia as a backup source for inventory, Howorth said. Some are even considering switching to manufacturers in the U.S., he said.

“I am seeing a frantic search for alternative supplies, including bringing home production of some of those components,” Howorth said in a March 2 statement.

Other companies are witnessing a decline in research and development activities due to company-wide bans on travel to international headquarters, Howorth said.

“A lot of those activities have really slowed down almost to a crawl if not stopped,” he said.

The Richardson Chamber had March meetings scheduled with delegations from Japan looking to do business in the city, but those meetings have been “put on ice,” Howorth said.

The U.S. is still one of the most attractive markets globally, so while business deal postponements are inconvenient, Howorth said he does not anticipate long-term consequences.

“I don’t think we are going to lose business, but I think it will be pushed back,” he said. “You may lose a few months, but I don't think they are going to change their mind.”

However, that could change if the coronavirus spreads to other major manufacturing centers, such as Vietnam and Mexico.

“That’s a much bigger cause for concern,” he said.
By Olivia Lueckemeyer
Olivia Lueckemeyer graduated in 2013 from Loyola University New Orleans with a degree in journalism. She joined Community Impact Newspaper in October 2016 as reporter for the Southwest Austin edition before her promotion to editor in March 2017. In July 2018 she returned home to the Dallas area and became editor of the Richardson edition.


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