Newsroom

Update: Supply chain situation due the Corona virus (COVID 19)

Updated 0401:

As the coronavirus (COVID-19) has a significant impact on NCAB Group, our customers and suppliers we are doing everything we can to protect our employees and support our customers and factories. Below you find the latest update on precautions for social responsibility and factory/capacity status.

  • To date, none of our employees have been infected by the virus. We are following local province recommendations and requirements on what measures to take to prevent the spread of virus and protection of our employees.
  • As the situation is improving in China, employee return rate has improved to just over 80%. The trend remains encouraging and we are seeing daily/weekly improvements in the operational capacity of our factories. 
  • The majority of our main factories are re-opened to visitors, which means our factory management team are getting back to routines of visits and presence in our factories, albeit with a cautious approach in terms of hygiene and visit frequency. 
  • Delivery performance show recovery due to our approach to prioritization and close communication with factories. We continue to demonstrate weekly improvements.
  • Our production partners in Europe and USA are running on high capacity utilization advising lengthening of lead times. However we have seen many instances where products critical for certain medical applications and other essential products are being given the appropriate levels of priority where possible.
  • To monitor the outbreak to lessen potential impacts NCAB has established a Corona virus task force, led by the CEO comprising the Group management team. The Group communicates regularly and meets minimum twice/week or additionally as the situation requires. 
  • When/where the local condition requires, employees who are not essential to be on site, will work remotely. IT solutions are secured so that the service level and communication with customers and suppliers will be kept at all times. 
  • We are working closely with our global and local logistics partners to book and utilize shipping capacity and to obtain a more accurate forecast with regards to order books.

For more information on how we handle the current situation, please read our updated Q&As below.  

Q&As on the supply chain situation due the Corona virus (COVID 19)

Current situation
The health and wellbeing of our employees is our top priority. To date, none of our employees including our 103 employees located in Shanghai, Guangdong or Hubei provinces have been infected by the Corona virus. NCAB Group Factory Management employees in China have resumed operational activities from our Shenzhen office, following completion of the Central Government imposed quarantine period, and will continue to operate in accordance with local Government recommendations with regards to travel and workplace health practices.
Employees in our companies in Europe and US are working remotely from home as the local authority recommendations/directives requires.

Air: Still a high number of cancelled passenger flights to/from mainland China and Hong Kong. Airline flight schedules may change at short notice to comply with regulatory directives or operational requirements. Less cargo capacity available and airlines announced PSS (Peak Season Surcharge), causing increased freight cost and affecting lead-times. We are working closely with our global and local logistics partners to book and utilize shipping capacity.

Sea: Shipping lines have earlier announced extensive blank sailing programs (cancellations) for their vessels, which continues in April. This reduces ocean freight capacity out of China. We might see congestions problems at ports and a tight situation as cargo volume increases. NCAB goods are going out of Hong Kong, which is less affected at the moment. 

Rail: Rail services continue normal operations. More and more European countries introduce border controls, which might cause delays in transit times.

Express: Longer transit times from China and Hong Kong. Cost increases; from April the Express service companies apply Emergency Situations Surcharges/Peak Surcharges.

What is the operational status of our factories?
Many employees have returned to work and this trend continues to improve – we see that this is greater than 80% as an average, with many factories also reporting that operational capacity continues to improve in equal measure.  
Of course as operational capacity improves, then so does the ability for our factories to build product and ship.
Lead times are not yet back where they were pre-Lunar New Year, but the lengthened lead times are to help balance the ability to manage both backlog and new orders that are being loaded with the factories.
We are also in a position now, where the majority of our main factories are re-opened to visitors and as such we have seen that our factory management team are beginning to get back into the routines of visits, albeit with a cautious approach in terms of hygiene and visit frequency. Yet, again, encouraging signs for a continuing strong recovery for our Chinese supply chains.

Whilst the situation has improved in China, it is our supply chains based in Europe and the United States of America, typically utilised for prototype orders that are facing their own COVID-19 challenges.
Our partner factories in these countries are running at high levels of capacity utilisation as they have been supporting urgent demands during the Chinese Lunar New Year and also as part of the total supply chain solution for NCAB. In addition, they and are beginning to see reductions in work forces impact operational capacity and therefore output.

What is the impact for PCB deliveries?
Whilst our ability to achieve our normal levels of delivery performance is improving, our approach regarding prioritisation and close, daily communication with factories continues. This focus is driving the ongoing recovery as demonstrated in our weekly delivery performance metrics.  

Some challenges will continue as we move into April, but the improvement from our main factories in China will continue to translate into sustained delivery performance.
Those factories based in European and United States of America are advising of lengthening lead times for new orders and potential delays impacting previously confirmed dates. However we have seen many instance where products critical for certain medical applications and other essential products are being given the appropriate levels of priority where possible.

What does NCAB do to assure I will get my deliveries?
Production:
Our Factory Management team in China remain in close contact with our factories both on operational and management level, negotiating and booking capacity to gain production priority – some of these activities are explained below:

  • Following up on rules and statements from Safety Supervision Bureau.
  • NCAB order lists updated and provided to the factory dedicated production teams – these are continuously reviewed / followed up daily along with general factory production schedules to ensure prioritization for NCAB orders.
  • NCAB Factory Management discussing with Senior management / owners within the factories to ensure prioritization.
  • Weekly delivery performance follow up at factories to evaluate performance

Logistics:
We are working closely with our global and local logistics partners to book and utilize shipping capacity and to obtain a more accurate forecast with regards to order books. As products are ready and shipping capacity available we will ship as soon as possible.

What are the risk of transmission from shipments?
According to: World Health Organization (WHO)
Is it safe to receive a package from any area where the COVID-19 has been reported?
“Yes. The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, travelled, and exposed to different conditions and temperature is also low.” 
Source: https://www.who.int/news-room/q-a-detail/q-a-coronaviruses

How can NCAB secure supply chain security for future orders?
Working closely with our factories to get priority support, we will do all we can to get competitive yet realistic lead times for future orders. Customers can help by placing orders up to June so we can get those orders in the production plans.

In the event of customers are forced to temporarily close down operations, we are prepared to work proactively and support in any way possible when operations resume to secure deliveries and production planning. We encourage an open and close communication.  

Who do I contact to get more information about my deliveries?
If you have any questions or concerns, please contact your local contact person at NCAB.
https://www.ncabgroup.com/contact/

How does NCAB monitor the Corona virus outbreak to lessen potential impacts?
NCAB has established a Corona virus task force, led by the CEO comprising the Group management team. The Group communicates daily and meets minimum twice/week or more as the situation requires. The Group discusses and approves actions, addresses risk scenarios and planning, ensures employee safety procedures are in place etc.       

What does NCAB do to contribute to protection of employees and population against the virus? 
NCABs local companies, in China, US and Europe follow local province recommendations and requirements on what measures to take to prevent the spread of virus and protection of employees.

China – Factory management
To further monitor and reinforce the action plan is implemented, NCABs organization in China has formed a dedicated team, responsible for daily actions to prevent the virus from spreading. Examples of actions are keeping staff body temperature records and assure masks are worn by all NCAB employees at all times both in the office, in our factories and traveling to and from work. Continuous disinfection of surfaces, office space, work stations, phones, and other public areas. Instructions to all employees regarding guidelines for travel / hygiene.

Working hours for our Factory Management team have been adjusted so that whilst our office is functional, our employees are able to travel outside of the peak rush hour times.

Travel ban
Further necessary measures to keep employees safe and work proactively to prevent a possible spread of COVID-19 is cancelling all business trips to/from infected areas until further notice. Employees and/or people in their vicinity are required a quarantine period (working from home) of 2 weeks after returning from a trip or longer if required/recommended by local health authorities. We follow the development and act accordingly.

Visitors in local offices
When visitors visit our offices we secure that they do not have a cold or any symptoms of a cold or have not been in an infected area. If they have, they cannot enter the office.

Employees working remotely
If the situation in the local area/office and/or recommendations/directives from local authorities requires, employees will work remotely for a temporary period. IT solutions are secured so that the service level to customers will be kept. Digital meeting tools such as Webex, Skype are used to communicate effectively with customers and suppliers.

Sources:
World Health Organization: https://www.who.int/news-room/q-a-detail/q-a-coronaviruses

Center for disease Control and Prevention:
https://www.cdc.gov/coronavirus/2019-ncov/faq.html

European Center for disease prevention and control:
https://www.ecdc.europa.eu/en/home  

Download updated document 20401 (PDF)