Impact of Covid-19 on Electronics Supply Chain

Since the ‘normal life’ as we know it, has been interrupted by Coronavirus pandemic, we have noted the following; 

Current Situation with Logistics and Supply chain

  • Air freight from China is delayed for approximately two weeks.  European and global shipments have similar delays due to increased demand for logistics, mainly caused by home shipments, due to the lockdown in majority of the world. 
  • We see minor delays in confirming our orders by material suppliers.
  • The greatest impact of COVID 19 in our supply chain is with bare printed circuit boards (PCB’s) as these are mainly manufactured in China. The PCB factories are working full-time, however some are still impacted by staff shortages caused by the pandemic there earlier. 
  • Parcel delivery service companies and air freight carriers are affected, and majority of these companies have implemented additional fees, which are subjected to the weight of the parcel. 
  • Since about half of the world's electronic components are produced in China, every European components supplier is affected as well.

Assel’s Status and Actions

  • Our production teams are working on full capacity and all operations are smoothly. We have implemented strict social distancing, hygiene restrictions and recommendations to all of our employees. We support our employees with all sort of required personal hygiene products. 
  • Some of our employees have been working from home which does not impact managing the projects of our Customers in any way. 
  • We are ordering all PCBs and components that we are able to order based on our agreements with our Customers. We provide direct recommendations to our Customers, where we see any danger of the materials being in allocation.  
  • We are constantly monitoring delivery dates and tracking information in order to update production planning and inform customers about new delivery dates as soon as possible. Today, mainly due to our enhanced planning, we do not see major delays. 

Our Recommendations to Our Customers

Our recommendation is to place orders as fast as possible and in advance of desired delivery date – some delivery delays may occur due to interrupted supply chains. If an order is urgent, European PCB suppliers are also available, however they are at low capacity and much higher prices.
Based on the information from suppliers and the market of materials, lead time increases and allocations are likely to occur this year, therefore it is essential to plan accordingly.

The Background Behind our Recommendations

Demand for air freight and parcel delivery services has increased dramatically due to the worldwide spread of COVID-19 - around 50% of the air freight capacity in the world is delivered via freight planes, whilst the other 50% is transported by passenger planes (passenger flights are largely cancelled, thus there is a major drop in the global transport capacity). Obtainable air freight capacity is prioritized for urgent medical supplies such as personal hygiene goods, respirators, that are also mainly produced in China therefore, air freight is drastically overbooked and freight prices have been increased radically, and in some cases also more than doubled per kilogram.
Strict lockdowns in many countries further complicate and disrupt the logistics. The situation is dynamic and can change at any moment. In case further developments arise, we will notify you. We will promptly notify our Customers, at any moment we see potential delays of  open orders. We are constantly observing the current situation. 
 

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