Shortages of components and raw materials because of the coronavirus are likely to be far worse than expected, experts warn, with most US companies unaware that they are exposed to Chinese factories idled by the outbreak.
“I guarantee you that most organisations have some level of exposure that they are not aware of,” said Alex Saric, chief marketing officer at Ivalua, a platform for digitalising procurement.
While companies closely track their direct suppliers — the tier ones such as Foxconn that would send Apple a finished iPhone — they can be blind to their suppliers’ factories, the tier two, and those further down the chain.
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