Brave Group is excited to announce an increasing investment into digital resources for the Motherboard team. Motherboard is Brave Group's digital communication and transformation business, headed by Musa Kalenga, Brave Group chief future officer.Issued byBrave Group
The IAB Bookmark Awards, an IAB SA initiative, celebrates its 13th year of rewarding excellence in digital and recognising the powerful impact interactive has on the overall marketing mix.Issued byIAB South Africa
Pandemic-strained supply chains are now creating a global shortage of semiconductors, a component used in a wide variety of consumer goods, from Samsung smartphones and Apple laptops to Ford Explorers and Sony PlayStations. Virtually every piece of electronics needs a chip, and the supply chain is much more complex than for toilet paper.
It may take up to 60 days for the supply chain system to reset itself to where it is functioning close to normal.
That means consumers will continue to feel the impact of these problems for months to come as well.
Lean and mean
The fundamental problem behind each of these disruptions is simply the inability of modern supply chains to adjust when something goes wrong, even briefly.
A big problem early in the pandemic, for example, was simply a lack of flexibility. While consumers were having trouble tracking down toilet paper because of panic buying and hoarding, there were plenty of rolls sitting in warehouses but intended for offices and restaurants. Companies had trouble diverting the toilet paper to the retailers, which kept only a very lean inventory of the product.
Consider the path and massive disruption caused by shortages of a simple chip, known as a display driver. Its only purpose is to convey instructions for illuminating a digital screen like the one on your phone, laptop monitor or navigation system in your car. There is a huge shortage of the chips – caused by supply problems and soaring demand. And this in turn has triggered a shortage of liquid crystal display panels, as well as a jump in prices, forcing automakers, airplane manufacturers and refrigerator makers to all scale back production. All because of a shortage of a $1 chip, in part triggered by minor disasters like the recent winter storm in Texas and a fire in Japan.
And a problem like the Suez Canal traffic jam is even worse because it represents an intersection – and bottleneck – for so many supply chains, including oil, parts and finished products. As cargo is shipped, there is a complicated choreography of vessels, ports, distribution centres and other modes of transport.
Accenture has acquired REPL Group, a technology consultancy specialising in solutions for supply chain, workforce management, store operations and retail customer experiences...
30 Mar 2021
A little more slack
The obvious solution is to add resiliency or slack into supply chains – to expect the unexpected. This would require moving away from aggressive “lean systems” that have virtually no excess inventory.
It doesn’t have to be terribly costly. As my own research shows, companies need only selectively add extra inventory, suppliers and capacity for certain critical items or at key chokepoints, such as for products identified as being in short supply, where there are few suppliers or where lead times are extra long.
This is not a recommendation to stock huge amounts of inventory. Rather, it is to say that there are advantages to being highly strategic – almost surgical – to ensure that the greatest resiliency can be achieved with only a small amount of additional slack.
Otherwise, the trends that led supply chains to become so lean and efficient will likely continue, leading to more and bigger disruptions for the global economy and more shortages and higher prices for consumers like you.
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