WE L C OME
The future
of supply
The last few weeks have seen the Coronavirus take a
hold across the globe. And while its health implications
are clearly the most serious factor, its economic and
industrial impacts cannot be ignored.
In February, for instance, JCB announced it was
cutting production and working hours in the UK due
to a shortage of components from China due to the outbreak. This came
about because 25% of JCB’s suppliers in China are closed because of the
disease.
Sadly, this is far from being an isolated example. Nissan also warned
that it might shut one of its factories as it can’t get parts from China.
Fiat Chrysler said the impact of the coronavirus epidemic could halt
production at one of its European car plants within four weeks.
Meanwhile, organisers confirmed that the world’s largest mobile phone
showcase, Mobile World Congress (MWC), has been cancelled over
coronavirus concerns, while the Hannover Fair – an event with a strong
claim to be manufacturing’s global showcase – has been postponed to July.
These disruptions to the supply chain at least are a direct (some might
say inevitable) consequence of extended global supply chains that it could
be argued are over-reliant on China. This is a strategy that could be coming
back to haunt global manufacturers.
In the short term, of course, there is little that can
be done to mitigate these problems. What will
be interesting, however, is to see whether in
the longer term, this crisis affects thinking
on component sourcing.
Paul Fanning
Editor
editor@madein.ie
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