The global semiconductor market has long been dependent on Asia, but here are some of the major factors shaping chip manufacturing in Europe.
How Has Coronavirus Impacted the Global Electronics Supply Chains?
In this blog, we take a look at how coronavirus has impacted on global electronics supply chains and what can be done to prevent future disruption.
What is impacting supply chains?
It is no secret that COVID-19 is having a huge impact on supply chains across all industries, and this is no different. The necessity for lockdowns and social distancing measures across the globe have meant that we are in a ‘new normal’ – one that makes things quite difficult for the industry.
Existing component shortages
An existing situation with component shortages, such as the shortage of MLCCs, has meant that the supply chains were already in a precarious position before the coronavirus outbreak.
Reduced production capacity
The supply chains rely on fully operational production centres, but due to the COVID-19 outbreak causing shortages of staff and necessary cutbacks, some have had to close completely, while others are no longer operating at full capacity.
Another significant issue with COVID-19 has been negotiating the transportation of components and finished parts. Travel restrictions have been put in place in many places across the globe, which means that it’s taking much longer for parts and products to arrive anywhere.
As we explored in a previous blog, on top of all these restrictions and shortages, there has also been a big demand for consumer electronics during lockdown as people are more likely to be stuck at home and bored. As an example, the Nintendo Switch sold out extremely quickly at multiple retailers and Nintendo were required to ramp up production.
What measures can be put in place?
The coronavirus outbreak has shown the importance of being more forward-thinking when approaching the logistics of the supply chain. We outline a few measures that companies can think about putting in place to reduce impact and manage the situation if another outbreak occurs.
Map supply networks
One of the most important things that can be done is the mapping of the supply network as a whole. This allows you to have all the information at your fingertips in times of crisis, including an insight into the structure of your supply chain as a whole and every single link involved.
Collaboration with partners
In order to fully map out and understand the supply chain, you will need to work closely with all of your partners and suppliers so that you know what is coming from where and through whom.
Formulate inventory projections
While you are working alongside your partners and suppliers, it is a good idea to get an idea of the inventory at all stages of the supply chain and what that could look like in a few days, weeks and months.
Carry out risk assessment
As well as simply mapping out the supply chain, you need to understand the risks available at each stage. For example, what will happen if the supplier of one particular important component or material becomes unavailable or has to shut down? Do you have a plan in place for disruption like this?
Have alternatives and contingency plans available
On a related note, it’s important to be flexible in your approach to the supply chain so that manufacturing does not have to completely halt if there’s an issue with one link in the supplier in mind. Diversify across different locations and have alternatives ready for emergency situations.
We hope you have found this article on coronavirus and global electronics supply chains useful. Rebound is always on hand as an independent electronics component distributor to help you remain flexible and source components from around the world. If you have any questions, you are welcome to get in touch.