How COVID-19 Pandemic has Impacted the Supply Chain in the Electronics Industry
How COVID-19 Pandemic has Impacted the Supply Chain in the Electronics Industry

Author(s): Christopher Lim
Subject(s): ICT Information and Communications Technologies, Socio-Economic Research
Published by: Scientia Moralitas Research Institute
Keywords: electronics; manufacturing; supply chain; outsourcing; lean;
Summary/Abstract: For many decades, a relatively stable supply chain has endured for global industries. The Thailand floods, Japan’s Tsunami leading to a nuclear plant leak in 2011, and Iceland’s volcano eruption in the same year severely disrupted the global supply chain with the electronics manufacturing companies, but only for a short period of time. These natural disasters were confined to certain geographical sectors and the operational interruptions were short-lived. The COVID-19 pandemic has, however, presented companies with a radical set of challenges that will require a transformational shift in the supply chain strategy and operations management for all industries. By associating the VUCA (Volatility, Uncertainty, Complexity, Ambiguity) theoretical framework with the global supply chain challenges experienced in the COVID-19 pandemic, research hypotheses regarding future supply chain strategies for the electronics and semi-conductor industry players were developed and tested. Sample data was gathered with industry practitioners utilizing a convenience sampling. The results demonstrate that industry practitioners, research institutions, and the Biden administration have touted the need to re-shore manufacturing and reduce dependency on foreign countries. Outsourcing decisions justified through a cost-benefit-risk analysis must constantly be applied. Just-In-Time (JIT) and Lean, a prevalent strategy, has turned into an Achilles heel during the COVID-19 pandemic times. The trade-off analysis to maintain a safety stock of critical components has become an essential variable for decision-making. Single-sourcing is abhorred, while multiple-sourcing supported by increased data visibility with effective ERP systems has become a strategic imperative. Partnerships with vendors, suppliers, logistics providers, and all stakeholders must be strengthened and continuously enhanced in the VUCA supply chain for the years to come. The primary takeaway from the research is that top management and supply chain leaders must focus their efforts on building an agile and resilient global supply chain network as the days of relying on offshore manufacturing and an absolute JIT and Lean strategy is behind us.

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