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Chinese Manufacturers, Global Economy Impaired by Coronavirus, Sparking Need for Supply Chain Alternatives

With the recent outbreak of the 2019 Novel Coronavirus, the world’s second-largest economy is on lockdown and it is uncertain if or how contract manufacturers in China will be able to supply products to their American customers.

And the virus is already creating ripple effects around the world. According to the Wall Street Journal, the epidemic is “testing the entire global economic system.”

Coronavirus: A Major Crisis for Businesses Around the Globe

“We’re already seeing that Apple and Tesla are experiencing problems with their supply chains due to coronavirus,” says Ryan Gray, SGW Designworks CEO and Co-Founder. “It’s likely that other smaller companies are, too.”

The time period following Chinese New Year is already a notoriously tough time for manufacturers in China to operate effectively, as many factory workers choose not to return to their jobs after visiting home for an extended period. The coronavirus epidemic is likely to amplify this problem in early 2020. And, as entire provinces remain on lock-down and travel restrictions increase, it remains to be seen when business as usual will resume for many Chinese factories.

Finding Alternatives to Chinese Manufacturers

The spread of the virus has demonstrated how reliant the world is upon Chinese manufacturers, and businesses in the U.S. that depend on these sources for their contract manufacturing should be looking for alternative suppliers as quickly as possible.

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“We’re seeing many companies that manufacture their products in China are in a scramble — there is rising anxiety over whether these companies will be able to complete orders,” says Chad Barnes, Director of Business Development at SGW Designworks.

To help alleviate this crisis, our team is available to help companies looking to move their manufacturing elsewhere — for either the interim or as a long-term solution. Specifically, we have seen our contract manufacturers in Taiwan, Malaysia, Mexico, and the U.S. prove to be safe bets.

How Manufacturing Management Can Provide Relief 

Our network of trusted, world-class manufacturers is available right now for the production of PCBAs, enclosures, injection-molded parts, sheet metal parts, machined parts, and final assembly. Learn more about our Manufacturing Management service offering here.

Coronavirus has presented many unknowns for both individuals and businesses across the globe; retaining a reliable manufacturing source for shouldn’t be one of them. Get in touch to see how we can help.