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The effect of Coronavirus on the global supply chain

As governments and businesses across the globe continue to monitor and respond to Coronavirus, those in China have been living with COVI-19 for over two months now.

As empty streets replace daily lives, quarantine regulations and checkpoints – many businesses worldwide are beginning to feel the impact of attempting to operate in the middle of a health crisis.

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According to LinkedIn, financial markets around the world slumped after Coronavirus deaths spread into Europe, with twelve Italian towns on lockdown. Worldwide there are now over 80,000 cases of the virus. And at the time of writing, as the virus creeps into the Middle East and South Korea, the worry is that it will become pandemic. Additionally, the virus has seen £62 bn wiped off the value of the FTSE 100, and in the US the Dow Jones and S&P declared the sharpest daily decline for three years.

THE EFFECT ON UK SUPPLY CHAINS

In light of this, what does the immediate future hold for businesses who rely on an efficient supply chain to meet the expectations of their customers? With South East Asia currently producing almost half of the worlds goods, and China accounting for around one-quarter of global automotive production (including 8 per cent of global exports of automotive components) – many using just-in-time manufacturing – its no surprise that The Guardian recently reported that the virus is already disrupting many UK firms. JCB, the British material handling equipment maker, has cut working hours and suspended overtime for many employees due to a shortage of parts coming from China. Meanwhile, fashion retailer Primark, who source around 40 per cent of their goods from China, has warned it faces a clothing shortage, while Jaguar Land Rover and Apple have also voiced concern over supply chain resources.

DISRUPTION TO CONTINUE

The Manufacturer has also reported that supply chains in manufacturing companies could face months of disruption – even with some factories now reopening in China. Those manufacturing sites in the region that produce complex automative parts have struggled with production – the materials they need to build were unable to get through during the outbreak, and therefore production is currently slow – in turn affecting European and UK manufacturers who rely on these Chinese imports for their businesses.

Additionally, estimates suggest that somewhere in the region of 60 million workers have been unable to get to their factories because of travel restrictions on public transport, causing further shortages and delays. With the outbreak estimated to last into early summer and possibly beyond, things are looking bleak for many manufacturers. Indeed, two DBS Bank analysts, Taimur Baig and Samuel Tse have warned that a global parts shortage is likely if Chinas production fails to “spike” in the next few weeks. Amid this crisis, what can UK manufacturers do to alleviate their supply chain concerns? One answer lies with UK manufacturers Croft Filters and sister company CroftAM, who have taken steps to put the customer first.

KEEPING CUSTOMERS IN BUSINESS

Here at Croft, we have stocks of a range of materials (often for next-day delivery), including stainless steel mesh, perforated sheet, fine wire mesh, knitted wire, sintered filter mesh, and galvanised wire mesh plus a large selection of stock sheets that can be custom perforated very quickly, enabling us to keep our customers fully supplied with exceptional products, processes and support as well as providing a rapid turnaround on our bespoke service. And because of our investment in Additive Manufacturing, which plays a substantial role in improving supply chains, we can sometimes manufacture traditional multi-part components as a single part, thus decreasing assembly costs and dramatically enhancing supply chain capabilities by supplying innovative approaches. AM also allows increased part complexity so an improved function can be incorporated, compared to that offered by conventional parts. Additionally, this process can scale down production lead time and mitigate research time to justify tooling investments or waiting for the tooling to be produced. So, instead of taking months to get your product to market, it can take days – critical in enabling manufacturers to react quickly to demand and secure repeat orders; and a vital marker of service in the current crisis. Consequently, even with the current uncertainty across global supply chains, you can expect a reliable experience with Croft Filters – every time. And by working with us, you can provide exceptional service and leverage repeat business for your own company.

Thanks Neil