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
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Shenzhen Supply ChainLocal 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
Toyota announces further stoppages in Japan, China this week
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
Yantian Port – Guangdong Province
Yantian Port Congestion: How Can Shippers Navigate Another Major Supply Chain Disruption?
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
Sources