Uyghur Forced Labor Prevention Act (UFLPA) and Its Impact on Supply Chain
In 2021, the bipartisan Uyghur Forced Labor Prevention Act (UFLPA) was signed into law after nearly unanimous support from Congress. The UFLPA bans all raw materials and component parts that are mined, produced, or manufactured wholly or in part using forced labor in China, especially in the Xinjiang Uyghur Autonomous Region (XUAR), from entering the United States1.
The UFLPA is an important step in addressing a global humanitarian crisis of trafficking and forced labor, and it’s commendable that our government is doing its part to take a stand against such atrocities. It will also undoubtedly compound an already stressed supply chain issue that has strained business operations worldwide.
Let’s examine the effects the UFLPA will have on industries, including our own, and how we at South Florida Controls (SFC) can prepare for the potential impacts of this law.
The Supply Chain Impact
According to the Center for Strategic and International Studies, the XUAR produces nearly one-fifth of the world’s cotton and is the largest exporter of textiles and apparel2. Other industries rely heavily on manufactured goods from the XUAR, including the technical building services industry.
The impact the UFLPA will have in our space is expected to be significant, as a substantial number of our industry’s products are manufactured in the XUAR. This includes wires, sensors, generator parts, HVAC/Mechanical parts, and more. In short, we at SFC are likely to feel the effects of the UFLPA.
How to Prepare – And Why It’s Important to Your Business
The UFLPA goes into full effect on June 21, 2022, further amplifying concerns surrounding long lead times, work delays, and price volatility. However, there are actions we can take now to reduce the impact this will have on our business operations and the end-user. Such preemptive measures will also ensure our good standing as a provider of world-class customer service:
Procure an inventory of necessary parts so that you have a supply of materials quickly accessible. This will reduce extra lead times/delays that can impact how efficiently your team can work and ensure client timeframes are met.
Set up calls with your distributors to determine the UFLPA's impact on their supply chain and assess how that can impact your own inventory.
Diversify your portfolio of suppliers to ensure that you have multiple avenues from which to attain products and parts.
Meet with your project managers and procurement teams to review all current and upcoming projects to ensure that each one has an accurate and detailed list of parts.
Having a clear picture of the impacts the UFLPA may have on business operations will allow you to plan accordingly, stay ahead of a potentially worsening supply chain issue, and enable SFC to manage projects as efficiently as possible so that we deliver the best outcomes to our clients.
1 Uyghur Forced Labor Prevention Act | U.S. Customs and Border Protection Preview (cbp.gov)