If your supply of manufactured items includes China, the coronavirus is probably on your mind.
Everyone with a pulse seems to have heard of and is concerned about the coronavirus. Originating in China, companies shut, vacations and holidays extended, and the exact number of those affected growing. Death rates are not clear, but we heard tonight maybe 10-12 deaths have occurred in the US. Is your supply chain affected?
Airline schedules are postponing/cancelling flights to China, and especially in and around the city of Wuhan. This is particularly significant, and Wuhan “s home to its steel industry. An inland city, about 500 miles from Shanghai, Wuhan is a manufacturing center for automotive companies including Nissan, Honda, and GM, and other corporate hubs including IBM, HABC, Honeywell, Siemens, and Walmart. Wuhan’s manufacturing significance has grown over the past 15 years because as an inland city, it can draw labor from the surrounding area at lower cost than migrants traveling to other manufacturing areas of China. The overall cost of living and operational costs are also lower than China’s eastern seaboard factories. These economics have drawn large corporations and whole industries to develop manufacturing sites in Wuhan. Airports, railways, trucking, and logistics services are also excellent.
“Parts of your supply chain may originate or pass through Wuhan for manufacturing, assembly or finishing. If so, you can expect wide-spread shortages or delays for materials sourced or manufactured there. The length of the lock-down in Wuhan is unknown and your global supply chain for raw materials, parts, or finished goods may be at risk.”
The above quote is from Supply Chain Management Review’s 1/28/20 article “Coronavirus and Your Global Supply Chain”, and there’s a link at the end of this, should you be interested. In any case, we were interested in learning how China based supply chains might be affected by this virus. We have a close relationship with a partner dealing with forgings and castings (along with secondary operations) in China, and asked how this was influencing their business. In the event your business might be interested in such a supplier, click on this article from our website. We learned the company shutdowns are widespread, and since the national holiday was extended for an additional week, there will be a delay in supply at minimum. And no one knows yet what the future holds with Chinese companies.
The Supply Chain Management Review’s article further makes these observations:“If you are sourcing or manufacturing in China, consider this:• The incubation period is 14 days and during this time the virus is contagious. If you have recently traveled to Wuhan or know someone who has, be alert for symptoms• The virus is spreading around the world with cases identified in the U.S., Europe, Australia, and throughout Asia• It is unknown if the virus is transmitted only by people, but also by animals, on surfaces, and objects – some companies have already triggered testing of products and parts that have been shipped from Wuhan, for any signs of contamination• The U.S. Department of State has issued a travel warning for China and Hubei Province in particular, and has evacuated all non-essential personnel”.
We do not know if you are affected by this problem. We have always been interested in competing for manufacturing business currently done in China, and stand ready for any inquiries you might have. Our business is providing credible suppliers for manufactured parts and assemblies, and we have many companies standing by to help. Just give us a call at (513) 489-5252.
The complete Suppply Chaain Management Review article can be found here.