The IPC, a global electronics manufacturing association, is reporting that the new coronavirus could result in up to five-week delays in product shipment. The group says shipping delays from China and other countries are already having negative impacts on manufacturers.
According to an IPC survey of its members, 65% 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 now quoting. On average, executives expect shipment delays to be at least five weeks. The survey was conducted between February 11–16, 2020.
“The delays will likely have ripple effects for the rest of the year,” said John Mitchell, IPC’s president and CEO. “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.”
84% 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. Securing alternate sources requires an investment of significant time and money that must be weighed against the value gained,” Mitchell said.
IPC surveyed a variety of companies in the sector, including original equipment manufacturers (OEMs), electronics manufacturing services (EMS) companies, and printed circuit board (PCB) fabricators.