I work for a multinational industrial manufacturing company. We rely on local, regional, and global supply chain for many of our operations in most of our operating regions (US, Mexico, Europe, Asia, Australia, South America). All of the below are my fact-based observations, along with some color from peers in similar industries, although some are a bit camouflaged due to my company’s need to keep strategic info confidential for obvious reasons.
Ongoing global supply chain issues overall appear to moving from from stable (not good, but not really improving or worsening) to slightly worsening. Issues affecting operations searchlight around over time. One month the region the part is coming from has been hit by a COVID wave. Another month, we have a supplier-specific issue. The container constipation at major ports (especially Long Beach) continues. Big auto continues to sprint and stop, sprint and stop, depending on what is holding them back. This causes short term jolts across a number of supply markets, especially finished steel products like bearing quality steel bars, sheet metals, and the like,
Chips have been a problem and continue to be. Bearings and seals and various elastomerics have all been problems for the last 12 months or so. A 6 week promise date on a bearing can be revised without notice to 13 months. Then back to 4 months. Etc.
We are just beginning to recover here in the US from local supply chain impacts from the Omicron wave. These impacts hit quickly, hit hard, then washed away quickly. Overseas shocks tend to be less severe but last longer due to the logistics chains acting as a shock absorber.
A significant COVID event is ongoing in China right now: the entire cities of Shenzhen and Jilin are in complete lockdown - that is about 45 million people. Also of note, individual apartment blocks (5,000 - 25,000 people each) in Shanghai are on lockdown, but they have not ordered a city-wide lockdown. Note: Lockdown in China is different than lockdown most other places - armed police (or military) supplemented by deputized citizen volunteers will not let you leave your housing unit. They do have provisions for food delivery. I assume this COVID wave in China is Omicron, but am not sure.
I don’t know much about Jilin (northern China) but Shenzhen (near Hong Kong) is a major player in finished electronics. Hon Hai aka Foxconn assembles a large portion of the world’s smart phones in Shenzhen for just one example. So, clearly, this will cause global supply chain ripples for months in both predictable (get your iPhones now, folks) and unexpected downstream markets (where are Connext systems assembled?)
The impacts from the war in Ukraine/Russia is a growing supply chain concern, too. I don’t know very much about specifics, but Black Sea shipping and trade out of adjacent countries Poland, Slovakia, Hungary, Romania are/will clearly be affected in addition to complete hard stop for trade with both Ukraine and Russia.
I am hearing we are in for at least another 3 or 4 quarters of ongoing supply chain challenges.
