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Pandemic impact on Supply Chain

Supply Chain Issues from Shenzhen lockdown of 2022

Presenters:

Brittany Green

 

Shenzhen Background

The most populous city in China

“Technology Hub” of China

Supplies most technology companies with product manufacturing

Shenzhen lockdown began in March 2022 from Covid outbreak

Lockdown halted and slowed manufacturing and supply chain

 

Shenzhen Lockdown Impact

Led to many manufacturing plants halting production

Supply Chain paralyzed by minimization of goods produced

Regional port closed and is not processing shipments

Incoming shipment​ halted furthering supply shortage

(insert picture from britt’s slide)

 

Shenzhen Supply Chain Local Impact

Covid-19 outbreak spreads sickness locally

Workers were sent home from lockdown

Businesses could not function without employees

Local shortages from lockdown affect community

Low supply led to an increase in prices and heighten demand

 

Major suppliers impacted by lockdowns

Tencent – Apple’s oldest & largest supplier

Huawei Technologies – Second largest smartphone manufacturer

Foxconn- The world’s largest electronic manufacturer

BYD (Build Your Dreams) – Large vehicle part manufacturer

Volkswagen & Toyota

Foxconn Factory in China

https://nypost.com/2022/03/14/china-lockdowns-apple-toyota-and-volkswagen-close-factories/

Foxconn – apple supplier in shenzen- impact

Apple’s supplier, Foxconn is located in Shenzen

There were fears that this lockdown will impact the supply of Apple devices, resulting in shortages and loss of revenue.

Wedbush analyst Dan Ives estimated that if Covid restrictions persist for two to three weeks it could hurt overall iPhone production by 1% to 2% for the quarter, in an interview with Yahoo Finance.

FOXCONN – APPLE SUPPLIER IN SHENZEN- IMPACT

In response to this situation, Foxconn came up with the following plans:

Foxconn decided to shift more production to its plant in Zhengzhou, which has earned it the nickname of iPhone City.

Foxxonn also put up its new Chennai plant in India to be be ready for production

Foxconn also started talks to set up a new plant in Saudi Arabia.

As of March 16, the Shenzen plant began limited production under strict guideline of the authorities.

 

Vehicles & Vehicle Parts Supply Chain Issues

BYD battery factory paused production

Toyota & Volkswagen plants suspend production

20% of WV’s total production in China affected

50% of Toyota’s total production in China affected

Production lockdowns result in inflation & supply chain blocks

Toyota Manufacturing Plant

Yantian Port congestion from Lockdown

Yantian International Container Terminal serves most suppliers in Shenzhen

Processes approx. 90% of China’s Electronic shipments

Lockdown preventing goods from entering or leaving

Factories & distribution centers rely on Yantian Port

20,000+- containers blocked from leaving or entering the port

Shenzhen Lockdown Recap

Lockdown of 2022 affected many aspects of business

The local community’s life affected

Goods like electronics, cars, and phones affected

Incoming and outgoing shipments from regional ports affected

Overall affects the whole world in some way