The complexity of the electronics supply chain is such that, six weeks on from the earthquake, no one is sure what its effects will be on their businesses.
Apple called the component supply situation 'uncertain and therefore unpredictable.'
"Value chains are so complicated, it is hard to tell where the impact will be," says ARM's CEO.
ST's CEO cited the uncertainty caused by the earthquake as a reason for forecasting ST's Q2 sales in the range of -2 to +5.
For an industry which manufactures to tolerances measured in billionths of a metre, in which the researchers win Nobel Prizes and the salesmen have PhDs, it's anomalous that it can't forecast, plan, locate, track and measure its output.
"Value chains are so complicated, it is hard to tell where the impact will be," says ARM's CEO.
ST's CEO cited the uncertainty caused by the earthquake as a reason for forecasting ST's Q2 sales in the range of -2 to +5.
For an industry which manufactures to tolerances measured in billionths of a metre, in which the researchers win Nobel Prizes and the salesmen have PhDs, it's anomalous that it can't forecast, plan, locate, track and measure its output.
Agree with the opacity comment. In fact, this is one of the 5 reasons for the increasing complexity of supply chains.
See here for a full analysis:
http://www.simafore.com/blog/bid/56571/5-reasons-why-supply-chains-become-complex
The fundamentals of supply chains are antiquated: old paradigms constraint how we manage them. Unless we, as supply chain professionals, understand and transcend this, the flow of inventories will continue to be just a theoretical concept, impossible to be managed as such. A true digitalization of supply chains can provide visibility and control, potentially solving those issues that David explains, but this will be possible once those constraints are overcome.
I find it unlikely that Supply Networks will ever achieve the "ideal" level of visibility we might hope for.
Beyond depth and complexity, the other fundamental is the requirement to respect confidentiality.
Opaqueness helps thems closer to the customer beat up to their advanatge thems further from the customer (particularly the smaller ones). For example: if you figured an order was a blatant double order because you knew your customer would never sell that many widgets to their customers, would you bust your jaffas to honour it and then sit on all that unwanted inventory?
Ergo... don't expect the status quo to change!
Yes, The Baron, you're right - silly of me to ever expect anything better