A recent article published by Production Engineering Solutions magazine (PES Media @ukmfgnews) issued a warning to Supply Chain professionals spotlighting some near-term impact of the Coronavirus on manufacturing.
Manufacturers need to urgently review their supply chain to find out how exposed they are to the Coronavirus outbreak, explains Richard Wilding, professor of supply chain strategy at Cranfield School of Management explains. (PES Media)
Citing a 50% reduction in Air Freight and increasing backlog of shipping on the Yangtze River, we are likely just beginning to feel the initial impact on global manufacturing. In the article published February 3, 2020, PES Media reported hearing of a car plant factory in Germany that had already been forced to close for lack of raw materials.
In a February 16, 2020 article published by @TIME, Bloomberg Economics estimates China's economy is running at just 40-50% capacity. It could take months before a full recovery is made (back to full production levels).
A survey of 109 American manufacturing companies in and around Shanghai showed that although almost 70% were operating last week and more than 90% expected to be back by this week, 78% of firms said they didn’t have sufficient staff to run a full production line. (TIME)
If your Supply Chain is overly dependent on on materials (including electronic components or electronic manufacturing services) originating in China, perhaps now is a good time to reconsider US manufacturing.
Even before the Coronavirus outbreak, Material Handling & Logistics (@MHLeditor) reported results of a 2019 study revealing increasing motivation to reshore or at minimum maintain second sources within the USA to minimize risks to the Supply Chain.
It would be foolishness to speculate the full impact of the Coronavirus on electronics manufacturing. Will Distributors like Arrow, Avnet and TTI begin to report material shortages of electronic components (microcircuits, discrete devices, semiconductors) as current inventories are depleted and compounding impact of factory shut downs pushes out delivery schedules? Which geographical regions and market segments of China's manufacturing capacities will be the first to be "back online" and therefore have shortest backlog to work through to catch up? Which will be the last and therefore have the longest backlog to work through to catch up?
OEM's, EMS, and manufacturers from all industries are eager for answers.
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