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com

ISSN: 2230-9926 International Journal of Development Research

Vol. 12, Issue, 07, pp. 57675-57681, July, 2022
https://doi.org/10.37118/ijdr.24983.07.2022

RESEARCH ARTICLE OPEN ACCESS

THE IMPACT OF PANDEMIC IN SUPPLY CHAIN MANAGEMENT IN AN

ELECTRONIC INDUSTRY
Hermes Silva Santos*1, David Barbosa de Alencar2, Antônio Estanislau Sanches3, José Roberto
Lira Pinto Júnior4 and Kleber Mantovanelli Barbosa5
1Academic, of the Postgraduate Program in Engineering, Process Management, Systems and Environmental
(PPEPMSE) - Institute of Technology and Education Galileo of the Amazon – ITEGAM; 2Teacher of the
Postgraduate Program in Engineering, Process Management, Systems and Environmental (PPEPMSE) - Institute
of Technology and Education Galileo of the Amazon – ITEGAM; 3Professor of the Academic Department of the
Engineering and Technology Course at the University Nilton Lins – UNINILTONLINS; 4Professor of the Academic
Department of the Engineering and Technology Course at the Metropolitan University Center of Manaus –
FAMETRO; 5Administrative-Financial Director at the Educational Technological Institute of the Amazon - ITEAM

ARTICLE INFO ABSTRACT

Article History: The logistics, social and economic impact caused by the SARS-CoV-2 pandemic has unprecedentedly
Received 17th April, 2022 affected the supply chain of the electronics industry. Logistics was in high demanded during this
Received in revised form pandemic period, and it was key actor for chain balance, even faced so many challenges. The objective
08th May, 2022 of this case study is to demonstrate the supply chain of an electronics industry in the industrial pole of
Accepted 15th June, 2022 Manaus, evaluating the scenario before and during the pandemic, its main difficulties, from the
Published online 30th July, 2022 shortage of raw materials up to the high costs of international freights. The final good industry is totally
dependent on component industries, the complicating factor is that in general the components are
Key Words: supplied by Asia, and arrive in Manaus by sea and air transport. At the height of the pandemic, ports
Pandemic, Economy, Supply Chain, were closed and flights were canceled, causing impacts on the supply chain. Some components are
Raw Material shortage. produced by local industries, however they also suffered shortages of virgin raw materials for
processing, triggering consequences on the entire supply chain. The method used was a case study, and
used a strategic tool such as SWOT analysis, a quality tool such as ISHIKAWA, and a risk mapping
tool such as GUT Matrix and 5W2H action plan. Data were collected through interviews, observations
and archival information, allowing the researcher free to walk in the direction of construct solutions,
with the author's own experience, who works in the area, an important component of contextualizing
the research. From the observation of the data, it was evidenced that the analyzed industry started a
crisis management, and actions to mitigate and manage the impacts of the pandemic on its logistics
*Corresponding author: chain and despite the challenges faced, the company's business continuity results were achieved, and
Hermes Silva Santos bringing maturity to the integrated logistics chain management process.

Copyright © 2022, Hermes Silva Santos et al. This is an open access article distributed under the Creative Commons Attribution License, which permits
unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Citation: Hermes Silva Santos, David Barbosa de Alencar, Antônio Estanislau Sanches, José Roberto Lira Pinto Júnior and Kleber Mantovanelli
Barbosa, 2022. “The impact of pandemic in supply chain management in an electronic industry”, International Journal of Development Research, 12, (07),
57675-57681.

transport, but towards the customer. JÚNIOR and NUNES (2012),

INTRODUCTION highlight that more demanding customers, emerging markets,
geographic conditions and technology changes demand better levels
The world trade increasement has led to significant growth in GDP of operations. In this way, organizations seek new alternatives and the
over the last 99 years. Logistics supply chains have become the effectiveness of operational processes as tools to remain in the
world's leading enablers as commerce and the world is connected market. The logistics oriented to customers aims to ensure the right
through integrated supply logistics chains. It’s increasingly product, in the right quantity, at the right time and place, in order to
recognized that it is through logistical efficiency and effective supply maximize the efficiency and effectiveness of the operations system
chain management that the goals of cost reduction and service (SOBRAL and PECI, 2008). In this sense, any interruptions in the
improvement can be achieved (CHRISTOPHER, 2007). In this new logistics chain, such as: Crises with tsunamis, earthquakes, military
globalized scenario, the focus of logistics evolves not only towards wars between nations, terrorist attacks as 9/11, epidemics or
57676 Hermes Silva Santos et al. The impact of pandemic in supply chain management in an electronic industry

pandemics as SARS-COV-2 affected business around the world with actions, the data were grouped and validated so that they could
the shortage of raw material and leads to disruptions in integrated explain the problem, but could also guide us on how to use
supply chains and consequently to economic recessions. This management and quality tools, could mitigate the effects of the
economic crisis has resulted in substantial erosion of market pandemic on the logistics chain, with satisfactory results for the
capitalization worldwide. The impact of SARS-CoV-2 is very research.
significant not only on people's health but also on the world economy.
All companies, including the electronics industry that was the subject Search Flow:
of this research, are trying their best to keep people safety and
mitigate the impacts of the economic crisis caused. Logistics are the
protagonist in the recovery process and for stabilization to the new
normal. Trade is an integral part of economic activity and
development. In an economic system, countries exchange various
products, whether intermediate goods, inputs or services.
International trade creates a network of economic activity that are
generally called trade networks or integrated supply chains. Supply
chains are the main enablers of world trade and the world is
connected through them. The world economy is strongly connected
and influenced by supply chains and their developments. The most
efficient and competitive companies are those that are having the best
supply chains. Global competition is forcing organizations to develop
appropriate strategies to reduce costs, optimize processes and
improve customer service. Companies have realized that substantial
cost savings and market benefits can be achieved through more
effective management of their global supply chain. Advances in
corporate information and communication systems are being widely
disseminated with innovation processes and industry 4.0, which
opens up the processing capacity and access to data analysis, market
information, competitors, and especially customer behavior. One of
the main objectives of the supply chain is to link markets, distribution
system, manufacturing processes and partners to serve your
customers in different parts of the world with lower cost and higher Source: Author (2022).
service levels. Various developments in technologies, trade policies
have led to strong economic growth in the world. Supply chains have Figure 1. Search flow
facilitated the globalization of commerce for quite some time now,
and several disruptions have challenged this globalization such as
SARS-COV-2 started in late 2019. RESULTS AND DISCUSSIONS
MATERIALS AND METHODS Impact of SARS-COV-2 on corrugator paper industry: A supplier to
the electronics industry: The cardboard industry was one of the most
Key Tools for mitigation: This part describes the means used to affected in the period of social isolation. Basically, the paper industry
achieve the general objective of this research, which was to analyze bases its cardboard on raw material collected by recycling collectors
the impact caused by the pandemic on the integrated logistics of in cooperatives, and with the prohibition to leave the house. These
supplies in the electronics industry, demonstrating from the shortage collectors began to receive emergency aid intended by the
of raw material from local and international suppliers, as well as the government for people without income during the period of
unavailability of global transportation, and how the electronics mandatory isolation. As a result, paper companies used their available
industry took actions to mitigate the effects on its supply chain, stock and in the upturn faced one of the biggest shortages of
trough of management and quality toos used. The research method intermediate paper ever seen in the industry. Evidently, the price up
used was the case study, which allowed an in-depth analysis of the drastically in proportion to the lack of supply.
object of study, in this case, the effect on the electronics industry,
being concerned with questions such as "how" and "why" of the Dec/19 Dec/20 Dec/21 Gap
Material Type Category
BRL Price/Ton BRL Price/Ton BRL Price/Ton % Price/Ton
problem studied ( ACEVEDO and NOHARA, 2007). Were used Corrugater Paper Covering Paper R$ 2.700,00 R$ 3.600,00 R$ 5.100,00 89%
some strategic management tools such as SWOT analysis, and quality Box Fluting Paper R$ 1.950,00 R$ 4.430,00 R$ 4.868,00 150%
analysis such as ISHIKAWA, and risk mapping tools such as GUT Source: RISI (2021).
matrix and 5W2H action plan.
Figure 2. Paper Comparison price up
Data Collection: In this research were used: interviews, observations
and archival information (documentary research). The interviews
carried out were of the unstructured type, where the researcher is free This shortage was exacerbated by record exportationfrom the food
to develop each situation in any direction he considers appropriate, industry, which grew the most during social isolation, being one of
allowing the interviewee to decide how to construct the response the sectors that gained the most profit during the pandemic taking
(LAVILLE and DIONE, 1999). We use quantitative reports and advantage of social isolation and food consumption. In addition to the
surveys on the impact of SARS-COV-2 on the logistics chain, food industry, other sectors that took advantage were chemical
economic development, global value chains, world trade, transport industries that sold septic alcohol, protective masks industry, cleaning
and SARS-COV-2 reporting. industry and home appliances, with the vacuum cleaner being the
champion in sales in the period.
This research was developed through a real case study inside an
electronics company in the industrial pole of Manaus. The research Impact of SARS-COV-2 on the EPS-ISOPOR Industry:A supplier
took place with a problem of production lines shutdown as an effect to the electronics industry: The EPS Industry has also been impacted
of the impact of the SARCov-19 pandemic on the supply chain by the raw material shortage caused by the pandemic. Several
logistics. Through the theoretical foundation of the theme, and the petrochemicals around the world stopped producing expanded
collection of real data, interviews with those responsible for the polystyrene during social isolation and circulation retention policies.
57677 International Journal of Development Research, Vol. 12, Issue, 07, pp. 57675-57681,, July, 2022

The largest exporter to BR is the USA, which faced one of the most Instruction of the Federal Customs Service of Brazil No. 1,976/20, of
severe health crises of SARS-COV-2, 2, with 78 million confirmed September 18, 2020 are the main legislation on PADIS. See below
cases, with 950 thousand deaths. Despite the rise in prices, even with the price up in the previous and during the pandemic scenarios. There
the reduction in consumption, there was no significant increase in the are four companies in Brazil that manufacture this type of component,
transit time for the purchase of expanded polystyrene from the USA. however the inputs for thee manufacture of integrated circuits are

Dec/19 Dec/20 Dec/21 Gap

Material Type Category
BRL Price/Ton BRL Price/Ton BRL Price/Ton % Price/Ton
Expanded
EPS Cushion R$ 3.275,35 R$ 4.630,00 R$ 7.622,46 133%
polystyrene
Source: CMAI-IHS (2021).

Figure 3. EPS Comparison price up

Dec/19 Dec/20 Dec/21 Gap

Material Type Category
USD Price/Unit USD Price/Unit USD Price/Unit % Price/Unit
Integrated Circuit DRAM USD 3,08 USD 3,68 USD 4,68 52%
Source: IC Insights (2021).

Figure 4. IC Comparison price up (USD)

Dec/19 Dec/20 Dec/21 Gap

Material Type Category Dólar: 1:4,1096 Dólar: 1:5,4178 Dólar: 1:5,5569
BRL Price/Unit BRL Price/Unit BRL Price/Unit % Price/Unit
Integrated Circuit DRAM R$ 12,66 R$ 19,94 R$ 26,01 105%
Source: IC Insights (2021).

Figure 5. IC Comparison price up (BRL)

Dec/19 Dec/20 Dec/21 Gap

Material Type Category
Week Week Week Week
Integrated Circuit Leadtime 6 Weeks 12 weeks 20 weeks + 14 weeks
Source: Author (2022).

Figure 6. Lead time increasing for IC

Source: BR Central Bank, adapted by author (2022).

Figure 7. Exchange rate trend

Impact of SARS-COV-2 on the IC Industry: A supplier suppl to the imported, and they suffered doubly the impacts of the pandemic: a)
electronics industry: The Brazilian government encouraged the Scarcity of raw materials for manufacturing, and b) High dollar
semiconductor industry through the program called PADIS. The caused by the recession world economy. Although the items are
acronym is Support Program for the Technological Development of manufactured in Brazil, they are not billed to the market based on the
the Semiconductor and Displays Industry. It is a set of federal tax average central bank dollar. In addition to the rise in prices above,
incentives instituted with the objective of contributing to the this type of component had a significant increase in acquisition time.
attraction and expansion of investments in the areas of With a globally
lly technological world, the search for integrated circuits
semiconductors and displays. These incentives include photovoltaic has become a huge challenge for different types of industries, as all
cells and modules/panels for solar energy, as well as strategic inputs products are now electronic and require integrated memories.
for the production chain, such as silicon ingot and purified silicon.
PADIS provides interested companies with exemption from certain Impact on the variation of the dollar in BR due to pandemic: Faced
federal taxes and contributions levied on the industrial with the economic recession caused by the pandemic, the real had a
implementation, production, import and nd sale of the benefited significant devaluation against the dollar. Of course, some imported
equipment. However, on the other hand, companies are obliged to raw materials and/or their transportation costs negotiated in US
make minimum investments in research and development (R&D) dollars also experience this increase in BRL (reais).
(reais) The variation
activities. Law No. 11,484/07, Decree No. 6,233/07 and Normative between Dec 2019 to Dec 2021 was 35%. Unfortunately, it is a
57678 Hermes Silva Santos et al. The impact of pandemic in supply chain management in an electronic industry

permanent effect on the economy, which will only recede as the real worldwide disorganization of lack of containers. In the recovery, it
strengthens. was not so easy to get new allocations and unfortunately, in order not
to miss shipments from Asia to Brazil, many companies had to
Impact of SARS-COV-22 on the Plastic Injection Industry: A choose to pay the price of spot containers.
supplier to the electronics industry: The
he impact of the pandemic on
the plastics transformation business had different nuances, ranging Actual Impact Mitigation Actions using strategic & quality tools
from companies that faced mass cancellation of orders in the face of
initial uncertainty, to those that began to occupy their productive Crisis Committee: The organization created a crisis committee to
capacity with the manufacture
facture of essential items for hygiene care manage the effects of the pandemic.
aimed at contain the spread of the coronavirus.
Dec/19 Dec/20 Dec/21 Gap
Material Type Category
BRL Price/Ton BRL Price/Ton BRL Price/Ton % Price/Ton
Plastic Injection HIPS R$ 3.366,46 R$ 4.894,39 R$ 7.622,46 126%
Source: HIS-CMAI (2022).

Figure 8. Plastic resin Comparison price up (BRL)

Impact on airfreight: (Leadtime and Price)

Aug/19 Aug/20 Aug/21 Gap

Freight Way Category
Price USD 4,90 USD 15,00 USD 21,00 329%
Air (Cub)
lead time 5-7 days 20 days 25 days +20 days
Source: Author.

Figure 9. Price Comparison of air transportation price up (SPOT)

Impact on sea freight: (Leadtime and Price)

Source: Author.
Figure 10. Scenario of 2019 for Sea transportation leadtime: (Before pandemic)

Source: Author.
Figure 11. Scenario of 2021 for Sea transportation leadtime: (During Pandemic)
Aug/19 Aug/20 Aug/21 Gap
Freight Way Category
Price USD 1.980,00 USD 2.200,00 USD 4.580,00 131%
Sea (40" feet) lead time 47 days 52 days 77 days + 30 days
Source: Author.
Figure 12. Historical trend of sea freight prices - Contract Scenario

Aug/19 Aug/20 Aug/21 Gap

Freight Way Category
Price USD 4.500,00 USD 10.000,00 USD 26.000,00 478%
Sea (40" feet)
lead time 47 days 52 days 77 days + 30 days
Source: Author.

Figure 13. Historical trend of sea freight prices –SPOT Scenario

Despite the 126% increase in the cost of self-impact
impact High Impact
Polystyrene (HIPS), there were no delays in deliveries from plastic
injection suppliers, as Manaus has a large manufacturer of HIPS
resin, which has prepared enough stock to serve the companies in
Manaus.
There are two modes of contracting ocean freight:

a) Price per contract, based on your monthly allocation.

b) SPOT Price – Sporadic, when you want to bring a container
outside the contract.
Source: Author.
At the height of the pandemic, many companies suspended operations
operatio
Figure 14. Organizational chart of a Business Crisis Committee
and renegotiated space allocations on ships, which caused a
adapted to SARS-COV-2
SARS
57679 International Journal of Development Research, Vol. 12, Issue, 07, pp. 57675-57681, July, 2022

GUT Matrix
Final
Problem Description Gravity ( G ) Urgency ( U ) Tendency ( T )
Priority
Change the breakfast time of the administrative staff to 7:15 am,
Not Serious 1 Resolve as soon as possible 3
It will get worse in the medium term3 7
in order to rotate the teams and ensure the necessary distance.
Close list of VPN requests to define employees who will be
Not Serious 1 Can wait a while 2 It will get worse in the long run 2 5
released for home office
Check with the doctor about the need for release of pregnant
High Serious 5 solve with some urgency 4 It will get worse quickly 5 14
women and people over 60 years old, as they are in the risk group
Provide backup masks on routes, to replace those who forget Litte Serious 2 Resolve as soon as possible 3 It will get worse soon 4 9
Implement mask use for all employees and visitors High Serious 5 Needs immediate action 5 It will get worse soon 4 14
Increase the points of Alcohol in Gel on the Plant High Serious 5 Needs immediate action 5 It will get worse quickly 5 15
Source: Author.

Figure 15. GUT Prioritization Matrix for plant health risks

Final
Problem Description Gravity ( G ) Urgency ( U ) Tendency ( T )
Priority
Ship delay due to port congestion Serious 3 solve with some urgency 4 It will get worse in the long run 2 9
Lack of allocation of containers within the contract Litte Serious 2 Resolve as soon as possible 3 It will get worse in the long run 2 7
Material shortage due to Wuhan city closure High Serious 5 Needs immediate action I5t will get worse in the medium term3 13
Ship delay due to covid-contaminated crew in Manaus. High Serious 5 Needs immediate action 5 It will get worse quickly 5 15
Lack of Integrated Circuit due to closure of factories in China Serious 3 Resolve as soon as possible I3t will get worse in the medium term3 9
Lack of local transport to pull container from port Not Serious 1 Can wait a while 2 It will get worse in the long run 2 5
Limitation of flights from Asia to BR Serious 3 Can wait a while I2t will get worse in the medium term3 8
Source: Author.

Figure 16. GUT Prioritization Matrix for logistics risks

Ishikawa
Cause Effect

Material Manpower Method

1. MP shortage 1. Crew of ships stopped in port in quarantine 1. Change of ship route

1.1 - Closing of 2. Absence of MAPA Inspector sick by

suppliers in Wuhan Covid 19

1.2 Yantian Port

3. 25% absenteeism
Closing

3.1- Covid license confirmed

1.3 Arrival of Material outside
the necessary separation time
required
3.2 - license for suspected covid

1.4 Local Suppliers

with imported raw 3.3 - Family death leave
material restriction
3.4 - Government decree for risk groups

3.5 -Holiday Exchange (MP 927/20)

LINE
SHUTDOWN

1. Psychological impact due to charged environment

due to many cases of the disease
and deaths of family members/colleagues

Machine Environment Measure

Source: Author.

Figure 17. Ishikawa diagram related to (causes) of line shutdown

57680 Hermes Silva Santos et al. The impact of pandemic in supply chain management in an electronic industry

The creation of a crisis committee for a company must involve the An action in beige is little serious, and should be second. Two actions
main directors, managers in the company's decision-making process in green are not serious, but they can get worse in the medium/long
for assertive decision making. In the SARS-COV-2 scenario, we term period. Above, it is possible to see three actions have top
absolutely include the company's medical team for decision-making. priority, an action despite being very serious has second priority. Two
The organization chart above is just an example created in the study actions are serious and worsen in the long term, and one action, even
of the real case analyzed in the electronics industry. Of course, each if serious, generates an impact in the long term. This prioritization
company is free to develop the ideal format adapted to each situation. process is extremely relevant in crisis and conflict situations. The
The committee is an excellent cross-functional group in the decision- research company uses task prioritization processes in a very agile
making process and was very helpful in the case of this researched and practical way, giving greater focus on more critical activities that
company. generate greater impact on the operation. The fishbone diagram, or
Ishikawa, generally has a more quality focus. However, the research
GUT Matrix: Above, it is possible to see by the colors that the company uses the tool for root cause analysis of serious day-to-day
actions with the highest score should be prioritized, from highest to problems. In the case evaluated above, the line stop is an
lowest in priority scale. Three actions in pink are very serious, and effect/impact of the lack of material generated by the impact of SARS
should be a priority. VOC 2 and its logistic impacts.
5W2H
What Why Where When Who How How much
where will it be by who will it How much will it
what will be done? why will it be done? when will it be done? how will it be done?
CAUSE FACTOR done? be done? cost?
EXPECTED PLACE OF Start Duration HOW WILL IT BE
ACTION PLAN OWNER COSTS
OUTCOME PERFORMANCE (dd/mm/yyyy) (days) DONE?
Evaluate ETD/ETAF
Evaluate matched Simulate production list of CKDs that
Director
CKD stock plan and line Manaus Plant 01/05/2020 2 have already left the R$ -
SCM
coverage autonomy origin

Email all suppliers,

To check the impact
Ask suppliers for and compare total
Raw Material of the injected parts Director
Material their up-to-date Manaus Suppliers 01/05/2020 3 inventory with our R$ -
Shortage (Styrofoam and Purchasing
resin inventory available CKD
Plastic)
demand
Change the modal Check material
To make the wedding
from sea to air from Director availability and
of CKD Kits in Manaus Plant 01/05/2020 2 R$ 50.000,00
WIFI Board and Purchasing cost/freight for
transit or at home
Remote Control approval
Source: Author.

Figure 18. 5W2H Action Plan for material cause

What Why Where When Who How How much
where will it be by who will it How much will it
what will be done? why will it be done? when will it be done? how will it be done?
CAUSE FACTOR done? be done? cost?
EXPECTED PLACE OF Start Duration HOW WILL IT BE
ACTION PLAN OWNER COSTS
OUTCOME PERFORMANCE (dd/mm/yyyy) (days) DONE?
Search the CV's bank
Check hiring of To make up for
Manaus Plant 01/05/2020 15 Director HR or contact an HR R$ 85.000,00
temporary workers absences by covid
agency
Ensure they are
Monitoring the
complying with Medical
treatment of covid Manaus 01/05/2020 30 Phone number R$ 200,00
medical protocols and Team
25% patients
Manpower prescriptions
absenteeism
For the factory in
alternating teams, to Evaluate which direct
HR
Recess using MP take advantage of the labor employees can
Manaus Plant 01/05/2020 30 Director/GM R$ 30.000,00
936/20 government incentive go on recess and
Directot
in salary rotate teams
complementation.
Source: Author.
Figure 18. 5W2H Action Plan for the cause of manpower
SWOT

Internal environment External environment

1.Health Team with 7 experienced people
1. Increase in sales due to isolation (people at home)
strength 2. Global Logistics Team in Asia opportunities 2. Emergency government assistance
3. Company with solid capital to face crises 3. Solid contract with shipowners in the resumption
4. Production of Verticalized Displays
1. Wuhan plant (Epicenter) was closed, and was a
1. 25% absenteeism at the peak of Covid
supplier to BR
2. Lack of Containers Globally
Weakness 2. Low possibility of working from home office threats
3. Delays of Ships by Contaminated Crew

4. Long transit time from Asia/Manaus

Source: Author.
Figure 19. SWOT analysis of the electronics company in the face of the pandemic
57681 International Journal of Development Research, Vol. 12, Issue, 07, pp. 57675-57681, July, 2022

We demonstrate above, a tool widely used in industries for the PDCA Postgraduate Program in Engineering, Process Management, Systems
cycle. We evaluated an action plan of the two main causes of the and Environmental (PPEPMSE). To Academic Department of the
Ishikawa diagram for the line stop. a) Scarcity of raw materials, and Engineering and Technology Course at the University Nilton Lins –
b) Lack of manpower. These causes were immediately mitigated by Uniniltonlins. Academic Department of the Engineering and
the actions proposed in the research object. As shown above, facing a Technology Course at the Metropolitan University Center of Manaus
pandemic scenario is not easy for any company. Only those that have – FAMETRO. To Educational Technological Institute of the Amazon
it frequently review their strategic plan and take action to correct their – ITEAM And to the multinational Chinese electronic Industry to
weaknesses. The electronics company evaluated is a strong open the opportunity for this searching.
multinational in their internal environment, and in its industrial
segment, so it went through the worst moment of the pandemic with
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fundamental in sending material and equipment to mitigate even
Ventilators and Personal Protective Equipement, This article was
greater losses without logistical efficiency. Imagine hospitals without
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for some segments and changed the behavior of the work
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objectives of this research were also achieved because it is possible to
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assess the impacts of the SARS COV 2 pandemic on the supply chain
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from it society will benefit from scientific knowledge added to supply
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Acknowledgment: To Institute of Technology and Education Galileo
of the Amazon (ITEGAM) for supporting this research and the

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