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Global Category Intelligence

Q2 2025

ALERT: Myanmar Earthquake Disrupts Indirect Procurement Operations

Implications & Recommendations

Categories: Natural Disasters; Infrastructure & Transportation; Risk Management
Published: March 28, 2025

A devastating 7.7-magnitude earthquake struck central Myanmar on March 28, 2025, causing extensive damage across the region. The tremors were felt in Bangkok, Thailand, leading to building collapses and a declared state of emergency in several areas. This disaster has significant implications for professionals in indirect procurement, particularly those sourcing from Southeast Asia.

Impact on Indirect Procurement

Indirect procurement, encompassing the acquisition of goods and services not directly incorporated into a company's end product, is facing multiple challenges due to the earthquake:

Supply Chain Disruptions: The earthquake has severely impacted transportation infrastructure, including roads, bridges, and ports in Myanmar and parts of Thailand. This has led to delays in delivering essential indirect materials such as office supplies, IT equipment, and maintenance products.
Commodity Price Volatility: Myanmar is a significant producer of tin, a vital component in electronics manufacturing. Following the earthquake, tin prices on the London Metal Exchange surged by 2.5% to $36,140 per metric ton, reflecting market concerns over supply constraints. This price volatility affects procurement budgets and may necessitate renegotiation of supplier contracts.
Communication Challenges: Damage to communication networks has made it difficult to contact suppliers and service providers in the affected regions. This hampers the ability to obtain timely updates on order statuses and disrupts coordination efforts.
Risk of Sanctions and Compliance Issues: The U.S. government has previously highlighted supply chain risks associated with doing business in Myanmar, including potential sanctions and export control violations. The current crisis may exacerbate these risks, necessitating heightened due diligence.

Key Takeaways and Recommendations

To navigate the challenges posed by the Myanmar earthquake, procurement professionals should consider the following strategies:

Assess Supplier Impact: Identify which suppliers are located in the affected regions and evaluate the potential impact on your supply chain. Establish alternative sources where possible to mitigate disruptions.
Monitor Commodity Markets: Keep a close watch on commodity prices, particularly for materials like tin. Develop strategies to manage cost fluctuations, such as adjusting procurement schedules or exploring substitute materials.
Strengthen Communication Channels: Establish multiple communication pathways with suppliers, including backup contacts and alternative technologies, to ensure information flow during network outages.
Review Compliance Frameworks: Reassess your compliance programs in light of the updated U.S. business advisory on Myanmar. Ensure that your procurement activities adhere to international regulations to avoid legal and reputational risks.
Collaborate with Industry Peers: Engage with industry associations and procurement networks to share information and resources. Collaborative efforts can lead to more effective solutions and provide support during recovery phases.

The aftermath of the Myanmar earthquake presents considerable challenges for indirect procurement operations. Procurement professionals can navigate these disruptions by proactively assessing risks, diversifying supply sources, and maintaining robust compliance practices and support their organizations' resilience in the face of natural disasters.