Manufacturing relies on complex and complete production systems. When a key area or link goes wrong, the “butterfly effect” is easy to appear. The epidemic has made many companies feel the pressure from the supply chain, and has also made the seemingly unfamiliar term supply chain enter the public’s vision.

At the extraordinary G20 Leaders’ Summit on COVID-19 held on Monday, ensuring the security and stability of the global supply chain was a common call of all parties.

How important is the supply chain? What are the risks and opportunities in the supply chain under the pandemic?

How important is the supply chain?

Cut wires, insert clips, wire wiring, tape… In the 22,000 square meters production workshop of Qingdao Jimo Jingxin Electronics Co., LTD., workers are busy. “We are working hard to catch up with orders, and the automatic tangling equipment is running 24 hours a day.” Park Run-hak, head of the company’s management department, said it has produced about 200,000 sets of car wiring harnesses and has been sent to South Korea.

Automobile wiring harness is mainly used to transmit signals and power supply of various parts of the automobile chassis, engine, motor, etc., which is known as the “nervous system” of the automobile. More than 30 South Korean automotive wiring harness industry chain enterprises, Shandong occupies the vast majority. Every move of resuming work and production is related to whether the vehicle production can proceed smoothly.

An employee makes a car harness on a production line at a company in the West Coast New Area of Qingdao, East China’s Shandong province, Feb 26, 2018. Xinhua (Photo by Wang Peike)

Behind a garment are yarns, fabrics, accessories, trademarks and other chains, and the production of a car involves tens of thousands of parts. Manufacturing is interlinked, and every node is intertwined.

The supply chain determines cost control. The strength of China’s supply chain network lies not only in its large scale, complete variety and fast logistics, but also in the fact that many supplier enterprises can produce high-quality parts and semi-finished products at a lower cost.

The supply chain also determines efficiency gains and industrial safety.

Dishon Group is a well-known foreign trade garment manufacturing enterprises, not long ago converted to production of protective clothing. Zhu Lihua, chairman of the company, said that the global epidemic has spread, and the production of protective clothing has also fluctuated. “Many materials and accessories come from different suppliers, and if production is blocked in one region, it will be affected.”

The head of a number of large manufacturing enterprises interviewed by the reporter said that by the impact of terminal consumption and supporting supply in some countries, many enterprises in Southeast Asia are also facing the loss of orders and survival pressure, and the “Matthew effect” appears.

“The international division of labor is deepening, and the global supply chain system is expanding and deeply intertwined.” Luan Qun, director of the Institute of Policies and Regulations of the CCID Institute of the Ministry of Industry and Information Technology, said that the importance of the supply chain and the significance of win-win cooperation are more prominent.

Challenges and opportunities in supply chain

Market volatility, chain disruptions, rising costs… Under the epidemic, many manufacturing companies have felt the pressure from the supply chain.

Welded pipe, once became Ningbo Yixiang blow molding furniture Co., LTD. General manager Jiang Jinglei most anxious thing. Since the resumption of work, the supply of upstream raw material welded pipes has made the company in trouble. The local government urgently contacted and screened several suppliers with an annual output value of more than 15 million yuan for docking, and the enterprise operated normally.

“Can not control, very helpless, also very weak” is the emotion of many enterprises.

Pressure will always force enterprises to think and move forward. Under the crisis, many industries and enterprises began to reflect on the “supply chain”.

More resilient businesses survive better. Many small and medium-sized enterprises began to focus on the development of “Plan B”, the reserve of alternative suppliers, improve the industrial chain. Many large enterprises are already laying out or strengthening their control over the supply chain.