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Posted September 13, 2021

Supply chain disruptions

Rich Vurva

Drive past just about any automobile dealership in the United States and the scarcity of cars in the lot is striking. A worldwide shortage of semiconductor chips is blamed for the inability of the auto industry to keep up with demand.

Automakers aren’t the only businesses being disrupted by the shortage of these ubiquitous chips. They’re found in nearly every electronic device, from phones, to computers, power tools, household appliances and more. My wife and I are still waiting on delivery of a new refrigerator that we ordered last winter.

You have no doubt experienced similar frustrations in your personal and professional life. The distribution industry has scrambled over the past several months to deal with supply chain issues that kicked in during the pandemic. Demand swings throughout 2020 were likely the worst that many in the industry experienced in their careers.

In his article called “The Expediter: A New Role in Purchasing,” Jason Bader talks about a new position that one purchasing manager created to deal with supply chain challenges. The expediter focuses on filling the gaps created by lead time delays, product scarcity and allocation issues. The expediter serves as a backup to every team member, from helping track down open purchase orders, updating expected arrival dates, to sourcing alternate suppliers.

How long will the chip shortage last? An analysis by Bain & Company suggests that semiconductor manufacturers can increase their factory utilization to maximum capacity and boost output by a few percentage points, but that may cause production throughput times to suffer. Bain suggests that the shortage will likely stretch into 2022 at least. Gartner analysts said they expect the worldwide semiconductor shortage to last until the second quarter of 2022. Other experts fear that the shortage may stretch out until 2023.

Regardless of how long supply chain disruptions last, we may be in for a bumpy ride.

Rich Vurva
Twitter: @IndSupplyMag

This article originally appeared in the Sept./Oct. 2021 issue of Industrial Supply magazine. Copyright 2021, Direct Business Media.


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