While we hope to see a peaceful resolution in Ukraine as soon as possible, the uncertainty in the market is causing increased problems in your supply-chain

• Normally electronic goods are shipped by either flight or ship, but a lot of other goods are also being transported by train through the Trans-Siberian railroad. With the current conflict in Ukraine these shipments need to be redirected to alternative routes or will take up space in an already overbooked and pressured courier system.

 

• Increased utility costs may increase the cost for production, while the impact of this is still relatively small currently, the increased cost of basic utilities will also influence the cost of running a factory with a lot of power consuming machinery.

 

• Military budgets increasing substantially means more production of electronics in military equipment. For Western countries, most of this production is being done in European countries, USA, South Korea or Japan. The expected decrease in orders after CNY, causing reduced lead time, may not be coming any time soon from European suppliers.

 

• Ukraine is a huge country with people living in other European countries, where they may hold essential jobs working as a link in your supply-chain. Some of those people have left to fight in Ukraine.

 

• Other than crude oil, one of the main exports of Ukraine and Russia is metals such as copper, gold and iron which is used in production. A shortage in raw materials may be on the rise again.

Even though a lot of people who work in procurement have excellent planning skills, the increased insecurity in the market may cause more unexpected problems in the future.