How is the coronavirus affecting our Chinese suppliers?

Due to the spread of the coronavirus, the Chinese government has been pushing back the date for its citizens to return back to work from Chinese New Year (CNY) holiday from the original date of January 31. Officially, people were clear to return to work on Monday, February 10th, but we have found that in reality, the date will be later for the factories we work with most closely. Those 3 factories have all told us that they are currently planning to return to work on Monday, February 17. 

In the meantime, these factories have to implement sanitation measures before gaining government approval to return to operation. All of them have to go through thorough disinfection, prepare and file sanitation reports and then submit applications to receive permission to go back to work. They will also need to train staff on safety and sanitation procedures, plan and implement new production and production safety measures and purchase new cleaning chemicals, disinfectants, sanitary masks and thermometers. Once back to work, all employees will wear medical masks and will have their temperature monitored daily, while the managers have to ensure daily plant disinfection and cleaning.

new proceduresOne of our affiliate factories reviewing the safety and epidemic prevention guides

What does this mean for factories and our customers?

Delays. With CNY extended by at least two weeks, all lead times will be extended by at least that much time, but likely more. The additional sanitation and permitting measures will slow down the pace of production as well as its start.

Uncertainty. Nobody knows if work will truly resume on February 17, or in what capacity. Nor does anyone know when the next shutdown or slowdown will occur. 

First and last, this is a tragedy for the families of the victims and for all citizens of China and it is still unclear how much of an economic impact the coronavirus will have.

 

Thank you!

ola@thayer-consulting.com