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Shortages of components likely to be far worse than expected, warn experts
Experts say most US companies are unaware that they are exposed to Chinese factories idled by the coronavirus outbreak.
Resilinc, a California-based group that tracks more than 3m components to provide supply chain mapping services, has found that about 1,800 manufactured parts originate in the quarantined areas of China centred around Hubei province.
Bindiya Vakil, Resilinc’s chief executive, warned that many companies could be in for a rude awakening in the coming months as shortages emerge for capacitors and resistors, inexpensive but critical components used in the printed circuit boards necessary for a vast array of high-tech consumer electronics.
“The scariest thing we see is the highest numbers of parts [made in and around Hubei] are caps and resistors — tiny things nobody cares about — plus thermal components, plastics and resins, and sheet metals,” she said.
Ms Vakil recommended that companies prepare for six months of supply chain disruptions. In past crises, she said, overlooked areas such as consumer packaging have played out sized roles in causing shortages.
“After Hurricane Maria, hospitals really struggled with plastic bags,” she said. “It wasn’t the blood that was disrupted; it was the bags. That’s what always happens. Brands have a strong visibility on the expensive things — they talk to their suppliers weekly — but on these low-spend things, they don’t bother.”
Read the complete article from Patrick McGee in San Francisco and Andrew Edgecliffe-Johnson in New York at Financial Times>>