Will the Coronavirus delay the supply of vital components

Published Tuesday 11th February, 2020

Article written by CNN

Daletech, relies on parts that are made in China, and its executives are worried that factory closures caused by the coronavirus outbreak will prevent the arrival of vital components.

Daletech relies on components from China that it buys from UK suppliers. Its 14 workers then turn out circuit boards and other electronics that are used in industrial products such as welding machines.

Daletech had planned for factories in China to be closed for the Lunar New Year holiday, but it was caught off guard by the outbreak of a coronavirus that has killed over 900 people, infected more than 40,000 and prevented many manufacturing plants in the country from reopening.

Tracey Dawson, told CNN, Business the company has already missed one expected parts shipment. She's now counting on a second shipment that's due to arrive in just seven days.

"The majority of the materials we use are from the Far East and Asia," said Dawson. "There aren't any component manufacturers in the UK. There are major issues potentially."

Daletech knows where its parts are coming from, but James Crask, senior vice president at insurance broker Marsh, said that many businesses don't understand the risks that exist in their supply chains because they might not know, for instance, who supplies their suppliers or where they are located.

"I don't think we've really seen the full impacts of this incident yet," Crask said, referring to the coronavirus. "The deeper within the supply chain you go, the more vulnerable" companies are to unexpected issues, he added.

Daletech is confident its operations will be at full capacity again in two weeks to meet a delivery deadline before the end of February. The coronavirus is currently only a hiccup for the company — but an escalation of the crisis could result in lasting damage.

"We can continue as we are doing but I think if you are looking long term, there will be issues," said Dawson.


LMFLMANatWestGoldman Sachs