Surprise

Big Automotive Chip Shortage Is No Surprise

A chip shortage forced Volkswagen to stop production of some bestselling brands; a VW line in Germany last month.



Photo:

Matthias Rietschel/dpa/ZUMA PRESS

“Car Makers Collide With Global Chip Shortage” (Page One, Feb. 13) correctly identifies the auto industry’s current supply-chain woes as a self-inflicted wound. From the electronics-manufacturing industry’s point of view, automotive is mostly a low-volume, high-mix customer segment, and it requires buffering through component distributors. Instead, the auto makers’ extreme focus on cost optimization and lean manufacturing meant eliminating these valuable supply-chain partners. The focus on lean should have been balanced with a pragmatic view on the extreme cost of idled automotive production lines. To shut down production lines for $80,000 vehicles because of a missing $2 microcontroller is catastrophic.

Products like semiconductors that have longer lead times and large production lot sizes need distribution for efficient buffering between the manufacturers

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