Coronavirus will substantially cut into worldwide manufacturing revenue, finds ABI Research forecast

The unpredictability of the coronavirus outbreak means that the worldwide manufacturing revenue of $15 trillion forecasted for 2020 will see a serious and definite cut, according to global technology advisory firm ABI Research.

The virus will have both short and long-term ramifications for manufacturers, as supply chains are impacted.

Michael Larner, Principal Analyst at ABI Research, said: “Initially, plant managers and factory owners will be looking to secure supplies and be getting an appreciation of constraints further up the supply chain plus how much influence they have on their suppliers.”

“To mitigate supply chain risks in the longer-term, manufacturers should not only not source components from a single supplier, but also, as the coronavirus outbreak has highlighted, shouldn’t source from suppliers in a single location.”

In software applications in the manufacturing sector, ABO forecasts that the supply chain impact of the coronavirus will see manufacturers spend on enterprise resource planning rising to $14 billion in 2024.

Larner said: “Supply chain orchestration requires software to be more than a system of record and provide risk analysis and run simulations, enabling manufacturers to understand and prepare for supply chain shocks.”

“However, investments in robotics or IoT sensors and the like assume that assembly lines receive a steady flow of raw materials.”

“The coronavirus outbreak demonstrates that manufacturers need to be as focused on their supplier’s capabilities as they are on their factory floor.”