Printed circuit board production’s supply chain may ramp up in Japan soon

According to industry analysts, the news of the re-start of production confirms Japan’s manufacturing agility to overcome exceptional conditions and a commitment to deliver continuity in a highly complex IT supply chain.
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By Patrick Burnson, Executive Editor
April 04, 2011 - SCMR Editorial

Two key plants that produce 70 percent of the world’s copper-clad laminates, which have been shut since the Japan Tsunami devastated the Sendai prefecture, are hoping to re-open early this month.


According to industry analysts, the news of the re-start of production confirms Japan’s manufacturing agility to overcome exceptional conditions and a commitment to deliver continuity in a highly complex IT supply chain.


Copper-clad laminate is a critical raw material used in the production of Printed Circuit Boards (PCBs) and production is forecast to resume within two weeks.  The news comes on the basis that there are no more problems discovered in the plants’ fabric and utility, power and raw material sources. 
 

When the two factories in question, MGC and HKP, reopen there will have been no shipments of copper-clad laminates for approximately four weeks from these key suppliers.


“The total impact of this shortage is unknown as many manufacturers of PCBs have turned to their stock reserves to cover the period of no shipments from the two main suppliers,” said Probrand’s Iain Bowles,
Probrand, based in Birmingham, England, is a major supplier of top branded computer products.


He added that with a 70 percent hole in the supply of copper clad laminates, PCB manufacturers have been chasing a share of the remaining 30 percent of source material globally. 


“This shortage in copper-clad laminates will simply not be able to pick up the deficit of 70 percent global supply multiplied by four weeks. The cross-over period back to normal supply will challenge the very core of the supply chain.”


According to Bowles, Japan “is king” when it comes to cost effective production of this material and alternative sources will be costing manufacturers more; material price, freight and currency.  He added that this is likely to be felt in product prices further down the supply chain in the coming months.


“The big test is observing how stock and pricing in the IT channel will be effected by this considerable unrest in the global supply chain,” said Bowles. “There perhaps could not be a bigger test of manufacturers Business Continuity implementation and it is going to be very interesting to see which manufacturers have got it right and which have got it wrong.”


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About the Author

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Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

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