Survey: Manufacturers expect 5-week delays caused by coronavirus

  • Associated Press/ChinatopixA bank clerk disinfects banknotes Wednesday in the headquarters of the Suining Bank in Suining city in southwest China's Sichuan province. China's central bank has ordered banks to ensure the safety of the cash circulation through putting money through quarantine period or disinfection and destroying cash from places like hospital and public transport services to curb the spread of the coronavirus.

    Associated Press/ChinatopixA bank clerk disinfects banknotes Wednesday in the headquarters of the Suining Bank in Suining city in southwest China's Sichuan province. China's central bank has ordered banks to ensure the safety of the cash circulation through putting money through quarantine period or disinfection and destroying cash from places like hospital and public transport services to curb the spread of the coronavirus.

  • Associated Press/Jan. 28, 2020A Microsoft computer is among items displayed at a Microsoft store in suburban Boston. Microsoft says its supply chain is being hurt by the virus outbreak in China and will return to normal operations at a slower pace than it expected a month ago.

    Associated Press/Jan. 28, 2020A Microsoft computer is among items displayed at a Microsoft store in suburban Boston. Microsoft says its supply chain is being hurt by the virus outbreak in China and will return to normal operations at a slower pace than it expected a month ago.

 
Daily Herald report
Updated 2/26/2020 6:20 PM

Electronics manufacturers anticipate at least a five-week product shipment delay from suppliers due to the coronavirus epidemic, according to a survey conducted by Bannockburn-based global trade association IPC.

The group, which represents approximately 5,800 companies from all facets of the electronics industry, said shipping delays from China and other countries where the virus has spread are already having negative impacts on manufacturers. According to the survey conducted between Feb. 11-16, roughly 65 percent of manufacturers report their suppliers expect, on average, a three-week delay.

                                                                                                                                                                                                                       
 

However, electronics manufacturers expect delays to be longer than what their suppliers are currently quoting. On average, executives expect shipment delays to be at least five weeks.

"The delays will likely have ripple effects for the rest of the year," said IPC President and CEO John Mitchell. "The longer China is affected by the epidemic, and the more it spreads to other parts of the world, the supply chain will experience more and varied strains and disruptions."

An overwhelming majority (84 percent) of electronics manufacturers and suppliers are worried about the epidemic's impact on their business operations. Delays in receiving supplier inputs can lead to factory downtime, higher average costs, transportation bottlenecks, pressure for alternative sourcing, delayed sales, and delayed prototyping that slows the introduction of new products.

"In most cases, it's not easy for manufacturers to switch suppliers, if that's what turns out to be necessary," added Mitchell. "Securing alternate sources requires an investment of significant time and money that must be weighed against the value gained."

IPC surveyed industry professionals at electronics manufacturing companies, including original equipment manufacturers, electronics manufacturing services companies, and printed circuit board fabricators. Almost half of the respondents represent the contract electronics manufacturing services industry, which performs an estimated 25 percent of North American electronics manufacturing for original equipment manufacturers.

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