Volkswagen: Expect chip supply problems until 2024 The ongoing supply chain woes in the semiconductor market are set to last through this year and next, according to Volkswagen, which believes underlying structural problems are unlikely to be resolved before 2024. This opinion was delivered by the carmaker's chief financial officer Arno Antlitz in an interview with German …
The car manufactures response to Covid and lockdowns was to cancel their future chip orders. Then when the recovery came they went back to the chip manufactures and asked them to reinstate delivery only to find that the chip manufacturese were at capacity with new customers with firm orders for the next couple of years
Probably anything other than what they did, because it's been an utter shambles for several years now.
Certain brands have faired significantly better, Toyota has a much more diverse supply chain and Tesla seem to have weathered the storm pretty well.
There definitely needs to be questions asked of some CEO's and the performance of their company over the pandemic period. Clearly some were not up to the task.
Toyota quite literally wrote the book on just-in-time (JIT) namely the 'Toyota Production System'.
They understood that you can't just do JIT, without looking at the fragility of the supply chain itself, and accommodating for that. e.g. If you have a back up supplier for some item, make sure the backup supplier isn't in the same earthquake zone as the primary suppler. If it cant be avoided (just one supplier in the world, or they are all in one region of the world, then make sure you keep some stock. Check for single points of failure in the full supply chain, i.e. are multiple separate suppliers in turn depended on a single factory somewhere else etc etc.
Problem with most other car manufacturers, is they got the book, but only seem to have read a few chapters. So implemented JIT, without really any consideration of supply chain fragility.
Or put it another way, they prioritised cost reduction (aka profits), over resilience.
As Antlitz is quoted in the article to have said
The first task here is to create greater transparency throughout the supply chain. We then want to stabilize our supply chains via long-term contracts with capacity security,
it strongly suggests that he believes having long term contracts, i.e. not canceling orders as a knee jerk reaction, would be a good idea.
The problems with computer chip availability in the auto industries lies primarily with themselves. For decades, the HVAC systems were controlled by rheostats, thermistors, and bi-metal strips. Ford has decided to no longer provide rear seat temp controls because of the lack of chip. Automatic transmissions were operated by changes in oil pressure, not chips. Et cetera ad infinitum, ad nauseum. Add to that the decision to save a fractional penny a unit and send production to Asia and one can see the the auto company screwed the pooch royally.
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