Modern Australian
Men's Weekly

.

High-tech shortages loom as coronavirus shutdowns hit manufacturers

  • Written by John L Hopkins, Theme Leader (Future Urban Mobility), Smart Cities Research Institute, Swinburne University of Technology

There are now more than 45,000 confirmed cases of the coronavirus dubbed COVID-19 by the World Health Organization, and the disease has caused at least 1,115 deaths. The impact of the virus is now reaching way beyond public health: China is at the heart of global manufacturing, and as supply chains suffer, panic is beginning to set in.

In many provinces across China the government has urged hundreds of millions of workers to stay home to help reduce the spread of the virus. As a result, many factories have stayed closed since the Lunar New Year holiday in late January, halting the production of products and parts destined for countries around the world, including Australia.

Apple is one of the most high-profile companies affected, with its manufacturing partner Foxconn hitting a lengthy production delay, but they are far from alone.

Global supply chains, global problems

The sectors hit hardest appear to be high-tech electronics, pharmaceuticals and the automotive industry.

Globalised supply chains and just-in-time manufacturing mean many seemingly unrelated products are vulnerable to pauses in the flow of goods from China.

It only takes one small missing part to bring entire supply chains to a standstill. If a tyre manufacturer in the United States doesn’t receive valves from a supplier in China, a car plant in Germany won’t receive any tyres, and therefore can’t ship finished cars to its customers.

Something similar happened to automotive giant Hyundai, which had to suspend all operations at its manufacturing plant in South Korea due to a lack of parts from China.

Read more: We depend so much more on Chinese travellers now. That makes the impact of this coronavirus novel

Even tech companies such as Samsung, Google and Sony, which have moved their factories out of China in recent years, are being affected. They still rely on China for many components such as sensors or smartphone screens.

It is not just large businesses that will feel these effects. Many small businesses around the world also source products and parts from China.

The supply of these is now uncertain, with no sign yet as to when normal service may resume. For products and parts that are still being manufactured in China, new enhanced screening measures at all Chinese border crossings are likely to cause further delays.

How will Australia be affected?

The effects of the coronavirus are also being felt in Australia. China is our largest trading partner for both imports and exports. According to the United Nations Comtrade database, Australian imports from China were valued at A$85.9 billion in 2018. The biggest product categories were electronics and electrical equipment, making up A$19.8 billion, and machinery, which accounts for another A$15.7 billion.

Moreover, 90% of all Australia’s merchandise imports are from China, and half of those are engineering products such as office and telecommunications equipment.

Besides the well-publicised impact on airlines, universities and tourism, Australian construction companies are warning clients of upcoming project delays as a result of forecast disruptions in materials sourced from China. Aurizon, Australia’s largest rail operator, has said the coronavirus will delay the arrival of 66 new rail wagons being made in Wuhan, the city at the epicentre of the outbreak.

Expect shortages of high-tech goods

Product shortages could also soon be visible on retailers’ shelves, with electronics stores such as JB Hi-Fi and Harvey Norman expected to experience significant disruption to their supply of computers, televisions and smartphones.

When shortages like this occur, customers will struggle to buy the products they want, when they want them. The only channels available might be third-party resellers offering highly inflated prices. In extreme cases, supply shortages like these can also lead to panic buying and stockpiling.

More uncertainty ahead

It is commonly said that “when China sneezes, the world catches a cold”. So what is the long-term diagnosis for the coronavirus breakout, and what will the economic symptoms be?

As so much is still unknown about COVID-19, with no vaccine or formal means of preventing it spreading having emerged yet, it’s too early to predict what the full impact will be.

For many industries the next few months will bring high levels of uncertainty, with disruptions certain to continue, before recovery programs can start to gain traction.

This is obviously a worry for many organisations, but could also be a period of new opportunity for others, as the world comes to terms with this latest global health crisis. Supply chains that are agile enough to react quicker than their competitors’, or those with more robust risk management plans, might find themselves gaining greater market share as a result of this crisis.

Authors: John L Hopkins, Theme Leader (Future Urban Mobility), Smart Cities Research Institute, Swinburne University of Technology

Read more https://theconversation.com/high-tech-shortages-loom-as-coronavirus-shutdowns-hit-manufacturers-131646

How To Keep Vase Flowers Fresh Through Australia’s Coldest Months

Winter flowers develop slowly, which gives them stronger structure and longer vase life Heat from indoor environments is the biggest threat to th...

Artificial Intelligence is Powering the Growth of Australian Telehealth Services

Many Australians have traditionally experienced difficulties in accessing timely and quality healthcare, especially those who live in rural or remot...

Powering Shepparton’s Businesses: Expert Commercial Electrical Services You Can Count On

When it comes to running a successful business, having reliable, compliant, and efficient electrical systems is non-negotiable. From small retail ou...

Maximise Efficiency: Cleaner Solar Panels for Optimal Performance

Solar panels are a smart investment in energy efficiency, sustainability, and long-term savings—especially here in Cairns, where the tropical sun ...

7 Common Air Conditioner Issues in Melbourne – And How to Fix Them

Image by freepik Living in Melbourne, we all know how unpredictable the weather can be. One moment it’s cold and windy, the next it’s a scorchin...

Powering Palm QLD with Reliable Electrical Solutions

Image by pvproductions on Freepik When it comes to finding a trustworthy electrician Palm QLD locals can count on, the team at East Coast Sparkies s...

The Smart Way to Grow Online: SEO Management Sydney Businesses Can Rely On

If you’re a Sydney-based business owner, you already know the digital space is crowded. But with the right strategy, you don’t need to shout the...

What Your Car Says About You: The Personality Behind the Vehicle

You can tell a lot about someone by the car they drive—or at least, that’s what people think. True Blue Mobile Mechanics reckon the car says a l...

The Confidence Curve: Why Boudoir Photography Is the Empowerment Trend You Didn’t Know You Needed

Boudoir photography has been quietly taking over social feeds, Pinterest boards, and personal milestones—and for good reason. It’s not just abou...

Understanding Level 2 Electricians: Why Sydney Residents Need Licenced Experts for Complex Electrical Work

When it comes to electrical work around the home or business, not all electricians are created equal. In Sydney, particularly when you're dealing wi...

Retirement Anchored in Model Boat Building for Waterford’s Doug Unsold

WATERFORD — When Doug Unsold sees his ship come in, it’s usually one he’s crafted with his own hands. The 67-year-old retiree from Waterford ...

The Science Behind Alarm Clocks and Your Circadian Rhythm

Waking up on time isn’t just about setting an alarm—it’s about working with your body, not against it. At the heart of every restful night and...

How to Use Plants to Create a Calming Atmosphere in Your Home

In today’s fast-paced world, cultivating a calm, soothing environment at home has never been more important. Whether you live in a busy urban apar...

How Maths Tutoring Can Help Students Master Maths

Mathematics can be a daunting subject for many students, often causing stress and frustration. However, maths tutoring has proven to be an effective...

Refurbished iPads Are Better Than New Ones (Here's Why)

Image by rawpixel.com on Freepik Apple's refurbished iPad program has quietly become one of the best deals in tech. While everyone obsesses over the ...

Your Guide to Finding the Right GP: What Perth City Doctors Offer Today

Choosing a General Practitioner (GP) is one of the most important health decisions you’ll make. Luckily, Perth’s vibrant CBD now hosts a new ge...

Why Every Mining Operation Needs a Robust Safety Management System

Mining is one of the backbones of the Australian economy, particularly in Western Australia. Back in 2019-20, mining contributed 10.4% of Australia...

Australian Classic Literature Enjoys Resurgence

Welcome back to the good old days of storytelling! As the modern world becomes increasingly more demanding, returning to childhood favourites offers...