Skip to comments.Thai floods hit motor and hi-tech supply chains
Posted on 10/25/2011 3:29:22 PM PDT by TigerLikesRooster
Thai floods hit motor and hi-tech supply chains
Published: 25 October 2011
Flooding in Thailand, reckoned to be the worst for fifty years, is disrupting supply chains for a number of major manufacturers.
Heavy monsoon rains since July have affected large areas of the country and is now starting to affect Bangkok. More than 360 people have died in the flooding.
Toyota has production plants at Samrong, Gateway, and Ban Pho plants. It halted production at the three plants on 10th October as a result of parts-supply delays, although the plants themselves had not been affected. That decision is to be reviewed on 28th October.
And yesterday, the company said its planned to adjust production hours at its vehicle production plants in Japan from 24th October to 28th October as a result of the possible effects of recent flooding in Thailand on parts supply to Japan.
(Excerpt) Read more at supplychainstandard.com ...
The problem with the textbook concept of “just in time” is that
in the real world everybody needs a warehouse “just in case”.
Once a corporation is burned like that, it would give the outsourcing location a serious second thought.
That is bad for Thailand.
The automobile and computer component sectors have been hit especially hard: A factory run by Honda Motor Co. is completely submerged while a shortage of parts forced industry leader Toyota Motor Co. to extend a production shutdown until Oct. 28, potentially tarnishing Thailand's reputation as the "Detroit of the East."
Thailand is also the world's second-largest supplier of hard drives. Market research firm IHS iSuppli has warned that global output of the devices could fall by 30% in the last three months because of the floods, while Apple Inc. Chief Executive Steve Cook said in an analyst conference call that he anticipates a shortage of disk drives in the coming months.
California-based Western Digital Corp.'s plants are closed in the country, while Seagate Technology said its plants are still in action but could soon face a shortage of parts.
On Tuesday, Japan's Canon Inc., which makes digital cameras, revised downward its full-year outlook due to concerns about the impact from the flooding in Thailand. Although Canon doesn't operate its own camera plants in Thailand, its inability to secure supplies of certain parts from local companies hit by the flooding is adversely affecting Canon's camera business. Despite ongoing steps to broaden parts orders, the company said it will inevitably suffer some negative impact toward the year-end shopping season.
Canon also said Tuesday that it is proceeding with a temporary shift of ink-jet printer production to a plant in Vietnam and another Canon printer plant in Thailand. It expects damages to some of its facilities in Thailand due to the flooding along with output delays for some of its products. The company said the flooding in Thailand will lower its sales and operating profit by Y50 billion and Y20 billion, respectively, in the fourth quarter.
Meanwhile, Honda Motor Co. said Tuesday it has halted production in Malaysia due to parts supply disruptions caused by flooding in Thailand, in the latest sign of the spreading business impact of the disaster. Honda said in a statement it has yet to decide when to resume operations in Malaysia.
Our 18 year old daughter is in Bangkok right now. They’ve left one house for some relatives’ houses on the other side of town, and may need to leave this current place.
It’s a really big deal not only as it affects a world of consumer goods, but it’s also inundated massive amounts of crops out in the countryside.
We’re going to find out how important the sweet and gentle people of Thailand are to our world economy.
Just had a hard-drive failure on my HP notebook computer. Guy at the repair shop said it might take a few weeks to find a replacement, since the floods in Thailand now have cut off his suppliers’ source of hard-drives.
Moreover, reports on the Thai-language satellite channels we watch indicate that many factories in all sorts of industries have been damaged beyond repair.
This event is a huge, life-changing catastrophe for the USA’s most important ally in SE Asia, yet it basically has been ignored by the American news media — who would rather spend hour upon hour discussing Dr. Conrad Murray and baby Lisa. But then, what else is new?
A very interesting take on the matter. And I note that ASTV/News1 (Sonthi's channel) appears to be putting Mme. Yingluck in a bad light, while giving sympathetic coverage to the beleaguered mayor of Bangkok (name forgotten).
On the other hand, I wonder about the extent to which the Thai public-at-large will come to share the same sentiments, esp. the rural masses of the north and northeast who are Thaksin's bedrock supporters? A lot of them will probably be content to see Bangkok flooded so badly that the city can never recover.
(And the latter outcome seems a real possibility, no matter how many Dutch hydraulic engineers the World Bank can send to work on the problem. Seriously!)
The global just-in-time supply chain stubs its toe.
And for those wondering why chronic unemployment is becoming a problem for the US here’s a clue.