HOW HANWHA TECHWIN HAS MITIGATED THE EFFECTS OF INDUSTRY COMPONENT SHORTAGES AND SUPPLY DISRUPTIONS
You’ve likely seen the news about the supply chain disruptions of the past months. Unfortunately, new IPVM research shows that the current shortages and inflation are worsening — and won’t let up anytime soon. However, while all manufacturers are experiencing challenges in their supply chains, they are not all equally impacted. Hanwha Techwin is weathering the storm better than others, for a number of reasons, which I’ll outline below.
How did we get here? Of course, the effects of the Covid-19 pandemic on production are playing a major role. Lockdowns around the world meant that manufacturing was severely interrupted, while demand for many goods weakened. And, when assembly lines reopened once more, the huge demand for items such as microchips (and more) meant that manufacturers struggled to keep up. To make things worse, shipping containers full of those goods that had been manufactured, sat for weeks at ports as there were insufficient ships to carry them, workers to unload them, or trucks to transport the goods onwards.
There are additional reasons that are exacerbating the situation, including labour shortages caused by workers switching jobs, once in a lifetime weather events that caused disruption, and even a freak incident that saw the Suez canal blocked for a week in March 2021. The war in Ukraine has brought additional pressures, and lies behind challenges such as a shortage of everything from wheat and sunflower oil to, most critically for the industry, half of the world’s neon (used in making chips).
China under lockdown
And while much of the world is beginning to see the return of some form of normality, for many, component shortages and disruptions to supply chains will be a concern for a while still. The reason? Large parts of China including the major industrial city of Shenzen have been locked down as recently as March, and many cities remain under strict lockdown as part of an ongoing ‘zero Covid’ policy. Manufacturers with operations based there are clearly hampered as a result. As a Korean company with manufacturing based in Vietnam, we operate outside of China and therefore haven’t been as impacted as companies operating within the country.