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14 October 2011 | Adam Leach
Supply chains in the automotive, retail and
electronics industries have suffered disruptions as a result of current
flooding in Thailand.
Flooding began in July but became more
serious this month, and has affected 61 out of the country’s 77 provinces in
total, affecting many businesses. Thailand is a global manufacturing centre for
the electrical goods, automotive and electronics industries.
Domestic retailer Big C Supercentre - which operates 106
stores - has been forced to close its three distribution centres in Ayutthaya
province, which was hit particularly hard. However, before closing, the company
moved all stock within the centre to the second floor and requested that
suppliers deliver products directly to stores.
As a result, the company is confident it
will be able to operate at a relatively normal capacity. A statement said: “The
company considers that the contingency plans are working well. All stores of
the company still remain operational except one, which was closed due to
flooding and loss of power supply.”
Seagate, the data storage system manufacturer, has also
seen its supply chain suffer. Although all of the company’s factories are fully
operational, production of hard disks has been disrupted after suppliers of
components have been unable to fulfill orders and the extent of the disruption is
still not clear. In a statement the company said: “Given the volatility of the
situation, it is unclear what the magnitude of the supply chain disruption will
be to hard disk drive output.”
In the automotive sector both Toyota and Honda saw production in
the country come to a halt after supplies dried up. Toyota reported that
production in its three Thailand plants – responsible for around 8 per cent of
the company’s global manufacturing -has stopped due to parts shortages, and
that it would not restart until 17 October at the earliest.
A spokesman for the company explained that
the as a result of using just-in-time production, it is “left without a cushion
when disruptions occur”. Honda, which produces around 240,000 vehicles a year
at the factory, has also faced supply shortages and has had to close its
factory in Ayutthaya after the floods hit the industrial estate where it is
The hit for the two Japanese manufacturers
comes less than a year after they experienced severe disruptions in both
production and supplies when Japan was
hit by an earthquake and tsunami.