Shenzhen Lifts Lockdown: Supply Chain Disruptions Persist
Shenzhen, a major global export hub, has lifted its COVID-19 lockdown after a week, but experts warn of potential supply chain disruptions and a 'bullwhip effect'.
The lockdown, imposed due to a surge in cases, saw production plants in Shenzhen, including key manufacturers of carbon nanotubes (CNTs), operate at reduced capacity or temporarily shut down. This led to supply chain disruptions, particularly affecting industries in China and the USA. Tony Pelli, from the British Standards Institution, compares the situation to the 2021 Suez Canal blockage.
Pelli warns that a glut of products could cause congestion further down the supply chain, a phenomenon known as the 'bullwhip effect'. Meanwhile, the virus surge in Hong Kong, linked to the Shenzhen outbreak, has led to a shortage of coffins. Despite the resumption of production in Shenzhen, cargo flows remain impacted. Measures to control the outbreak include the closure of Disney's theme park in Shanghai.
With China's commitment to its zero-COVID strategy, Pelli predicts more shutdowns, advising supply chain managers to prepare for longer disruptions and increase shipping flexibility. The Shenzhen lockdown, though lifted, could exacerbate global supply chain bottlenecks, highlighting the need for resilience and adaptability in the face of ongoing pandemic challenges.
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