Published in China News on 31.03.2020
China News: How COVID-19 affected global supply chains
The COVID-19 pandemic has hit the business world in an unprecedented scale and speed. It has caused the closures of business, the stoppage of factory outputs, and the disruption to global manufacturing industries and their supply networks.
Major industries including automotive, electronics, pharmaceuticals, medical equipment and supplies, consumer goods and more have been significantly affected. This is a result of China having become a world production centre over the past two to three decades.
China provides the bulk of the components, raw or processed materials, as well as major subsystems to manufacturers globally. Not only have China’s original equipment manufacturers (OEMs) faced the challenges of resuming their production capacity but also global manufacturers have felt the impact of part shortages in their supply networks.
Companies inside China are slow to resume their normal productions due to various factors. These include the shortage of parts from lower-tier suppliers; the shortage of labour workers who might still be trapped due to the shutdown of their villages and other infected regions; the stringent requirements for companies to establish adequate protective measures and provide an adequate supply of protective gears for employees; and the slow recovery of transportation network capacity due to road closures and other emergency regulations and priorities.