Electronics Supply Chain Problems Affecting Manufacturing
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March 13, 2020
Since the coronavirus outbreak started, we have been on uncertain ground when it comes to impact. The COVID-19 virus originated in Wuhan and is a health crisis affecting a large number of people. It is still primarily concentrated in China, but ripple effects have spread around the world as all of China has begun to slow down production in areas most heavily affected by the virus. Even in areas outside of Wuhan, travel and shipping restrictions have slowed down deliveries. While there are a number of media stories about the impact on specific industries and companies like Tesla and cloud providers, we’ve had little clarity about what this means for the electronics manufacturing supply chain in North America.
Impact to MacroFab customers
The biggest impact to MacroFab customers will come in the form of longer than average lead times as we source components and materials. Our PCBs are primarily sourced from Taiwan, where factories remain open but short-handed as the engineers who traveled to mainland China have had trouble returning from New Year’s celebrations. Here’s what we know today about the impact on electronics materials supply chain and how it affects MacroFab’s customers:
PCB sourcing has slowed down by 3-4 days on average. The lead times you see in the MacroFab platform will always reflect the most accurate estimates we have, and we will continue to adjust lead times as we get guidance from our supply chain. We have not seen breaks in the PCB supply chain, but things are definitely moving slower. The best course of action is to allocate enough time in your projects to deal with these delays.
Most component sourcing has largely been unaffected. We are seeing longer lead times for some components, but most inventory used in Q1 is already in distribution, so we have not seen significant materials delays or shortages. The biggest risk to components right now is if US customers start to front-run their purchases, as we saw with tariffs over the last 2 years, which will deplete inventory faster.
Mechanical component lead times have slowed down most and the lead times will vary widely. If you rely on Chinese suppliers for your mechanical parts, its best to allocate plenty of time to absorb unexpected changes.
Keeping you updated
The long-term impact of the coronavirus is a moving target. Please continue to visit this page to get the latest updates as we learn more.
April 22: Many factories and suppliers in China are fully operational and back to normal. While health precautions there remain in place, their lead times are normalizing. All dates will be updated in our platform to reflect these changes. We are however still experiencing delays around shipping out of China. Please see the April 2 update below for more details.
Potential shipping delays: Now that Chinese factories are slowly beginning to return to work, their capacity is increasing. However, we may now be experiencing delays on the shipping side. Airfreight carriers like UPS and FedEx regularly utilize available space on commercial flights. Due to the impacts of COVID-19, many commercial airlines have suspended flights between mainland China and the US – some being suspended until April 30. This has put an unprecedented strain on shipments. What this means is we may continue to experience delays receiving materials from China. As always, we will factor any delays in the lead times on our platform and we will continue to keep you updated on your individual order.
Various postal operators in some countries are no longer able to process or deliver international mail or services originating from the United States due to service disruptions related to the COVID-19. Effective April 3 until further notice, USPS is unable to accept items destined for affected countries. Customers are asked to refrain from entering items addressed to countries listed into the USPS system effective immediately.
Effective April 6, 2020: A temporary surcharge on all FedEx Express and TNT international parcel and freight shipments will be implemented as the two companies continue to deliver under state-of-emergency and shelter-in-place restrictions issued in various parts of the world.
March 25: Our CEO, Misha Govshteyn released an update related to COVID-19 and what this means for MacroFab and our ability to continue to serve you, including an update on lead times.
March 13: MacroFab is still experiencing a 4-day delay on average for orders. Larger orders may experience lead times closer to five weeks due to longer material sourcing lead times. We will notify individual customers if your order is delayed. We will continue to closely monitor this situation as it unfolds.
February 26: Employees in China continue to come back to work, and those returning from affected provinces must be quarantined for 14 days. As a result, MacroFab is still experiencing a 4-day delay on average for orders. Larger orders may experience lead times closer to five weeks due to longer material sourcing lead times. We will continue to closely monitor this situation as it unfolds.
February 13: Standard lead times +4 days to accommodate for longer PCB production timeframes, lead times are reflected in our platform.
January 27: Standard lead times +3 days for February orders as the Chinese Government extended the national Chinese Lunar New holiday for an extra three days to stem the spread of the virus throughout most of China while extending it for a week in Shanghai.
January 1: Standard lead times are +7 days for some orders scheduled for February to accommodate the Chinese New Year celebration.
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