Research Outline

Epidemic Viruses - Supply Chain Logistics Impact


To have a broad understanding of how epidemic viruses affect supply chain logistics. An ideal response would provide whitepapers, information, statistics, and data surrounding how epidemics and disastrous events affect the economy and supply chain, and the tactics businesses can deploy to safeguard their operations. Finally, to provide evidence of how SARS, MERS and H1N1 affected the economy.

Early Findings

  • One estimate of the SARS outbreak suggested a cost to the global economy of $40bn (£30.5bn).
  • The new coronavirus outbreak will be worse for the global economy than the 2003 SARS outbreak was, data analysis firm IHS Markit predicts. “Coronavirus will have a larger negative effect on the global economy than the SARS outbreak in 2003,” IHS Markit wrote, adding that China accounted for 4.2% of the global economy in 2003. The report says China now commands 16.3% of the world’s GDP. “Therefore, any slowdown in the Chinese economy sends not ripples but waves across the globe.”
  • The economic impact of the coronavirus has been significant. On February 1, Apple closed all of its stores in China. Hong Kong’s Hang Seng Index dropped 9% since its January 16 peak. The price of Brent oil fell 23% from its peak on January 6.
  • The SARS outbreak only lasted between February 2003 and July 2003. In affected areas, travel and retail sales plummeted, and the lost economic activity was between $40 billion to $80 billion.
  • The 2014 Ebola epidemic infected 28,639 people and killed 11,316 in West Africa. Guinea, Liberia, and Sierra Leone together lost $2.2 billion in gross domestic product in 2015. Sierra Leone’s private sector lost half of its workforce.
  • A 2017 paper by economists Victoria Fan, Dean Jamison and Lawrence Summers estimated that the expected annual losses from pandemic risk to be about $500 billion, or 0.6% of global income, per year, accounting for both lost income and the intrinsic cost of elevated mortality.
  • A 2016 study by the Commission on a Global Health Risk Framework for the Future estimated that pandemic disease events would cost the global economy over $6 trillion in the 21st century, which is over $60 billion per year.
  • An IMF paper by David Bloom, Daniel Cadarette, and JP Sevilla notes that even when the health impact of an outbreak is relatively limited, economic consequences can be quickly magnified. The authors cite the case of Liberia during the 2014 Ebola outbreak, which saw GDP growth decline even as the country's overall death rate fell over the same period.
  • Businesses will be better positioned to respond and recover from epidemics if they invest in strategic, operational and financial resilience initiatives.
  • "Just as scientists are confronting an unknown enemy, corporate executives are largely working blind because the coronavirus could cause supply-chain disruptions that are unlike anything seen in the past 70 years. For now, the best course of action for companies is to analyze possible outcomes in the context of known supply-chain risks based on historical precedents, and to take precautionary measures that minimize exposure to future disruptions."
  • With Germany already experiencing flat growth at the end of last year, the effects of the coronavirus on business won’t help its prospects, and Europe saw its first auto plant idled because of a parts shortage due to the virus’ outbreak, according to an economic snapshot of Europe in The New York Times.
  • A research paper written by Thomas K. Dasaklis, Costas P.Pappis, and Nikolaos P. Rachaniotis in the International Journal of Production Economics which looked at epidemics control and logistics operations highlighted the importance of logistics supply in controlling epidemics.
  • This Gartner paper provides advice on preparing supply chains for disruption.

Summary Of Our Early Findings Relevant To The Goals

  • Our initial hour of research provided statistics, data, and information surrounding how epidemics affect both the economy and the supply chain. We provided a few sources surrounding the tactics businesses can deploy to safeguard their operations.
  • There was not enough time to address all the different aspects of the questions.
  • We were not provided a geographic focus, but we assumed a global look. If a more targeted approach is desired, for example, the United States, this would have to be clearly communicated to us in any reply.
  • Please select one or more of the options provided in the proposed scoping section below.