However, there a multitude of other forces in play which has caused supply chain shortages in all sorts of industries. Companies who are reliant on overseas manufacturing and, in particular, Chinese production lines are being hardest hit.
Manufacturing diversification – During Covid, companies have shown agility and should be heralded as those who were building computer chips for cars diversified to make chips for other electrical items that became popular while we were all working from home.
Manufacturing process – Lean manufacturing relies upon “just in time” working but that depends on everything being “on time” so the knock-on effect of the Suez Canal blockage, driver shortages and other issues has caused delays at many points within this just-in-time supply chain.
Suppliers to the car industry– It is hugely stressful being a supplier in the car-parts industry right now as they swing from one supply demand crisis to the next. Demand fluctuations have been so polarised – first it stopped dead during Covid, but has now picked up far faster than anticipated. Some areas are reporting upwards of 40% increase from pre-covid levels but sadly cannot keep up with demand. Because of the manufacturing diversification above. When car factories went back to full production and demand far exceeded expected sales, they could no longer source the chips so readily. The winners here are those in the second-hand car market which is booming right now with used cars selling far higher than the suggested book price.
Power supplies – This is an added complexity in some markets (particularly China,) where power supply (or the lack of it), is now a thing. And they are doubly challenged with the Carbon emissions agenda.
I have just binge-watched Clarkson’s Farm and cried with laughter in every episode but did choke on my supper with the irony of the farm eggs being supplied in plastic boxes because of cardboard shortages. Even in his efforts to help feed the nation and find ethical packaging not even Jeremy Clarkson could save the planet.
My point is we have to move away from the blame culture and accept that in our changeable world we all have to be responsive, responsible and do our best to react to changes to survive and even thrive in business.