Ford closes German plant for 1 month as global chip crisis worsens(edition.cnn.com)
edition.cnn.com
Ford closes German plant for 1 month as global chip crisis worsens
https://edition.cnn.com/2021/01/18/business/ford-auto-chip-shortage/index.html
4 comments
Yes, possibly the Bullwhip Effect[1] at play.
[1] https://en.wikipedia.org/wiki/Bullwhip_effect
[1] https://en.wikipedia.org/wiki/Bullwhip_effect
There is an actual wafer shortage and arrogant automotive suppliers thought they could order on short notice.
Turns out silicon valley customers like Apple and Nvidia order a year or more ahead and prepay for capacity instead of phoning at the last minute and demanding "standard" 120-day terms for the privilege of having their business. I know who I'd sell my capacity to.
Turns out silicon valley customers like Apple and Nvidia order a year or more ahead and prepay for capacity instead of phoning at the last minute and demanding "standard" 120-day terms for the privilege of having their business. I know who I'd sell my capacity to.
The "chip crisis" seems to be a red herring here. The more obvious explanation is the one stated in the article's second paragraph: that demand for new cars is low right now (probably, I'd wager, because people are typically unwilling to sink tens of thousands of dollars into a new car amid an ongoing rollercoaster of income insecurity). And instead of acknowledging the more obvious and simpler explanation, auto manufacturers prefer to blame external forces (never mind that even those external forces are hitting the auto industry specifically because of - you guessed it - the low demand for cars in the midst of economic uncertainty).
Maybe I'm missing something?
Maybe I'm missing something?
Sounds like an inability to predict demand accurately given the uncertainties introduced by the pandemic.