Elon Musk probably said it best when the Tesla (TSLA) CEO declared, “the supply chain stuff is really tricky.”
Oh, you’d better believe it.
The supply chain—the network of people, organizations, and information that moves a product or service from its origin to the final customer—is crucial to the world’s economy, as it ensures efficiency and lowers costs.
The COVID-19 pandemic exposed just how fragile global supply chains are.
“For decades, we have grown accustomed to ever quicker deliveries with increasing methods of tracking,” said David Dreyfus, Rutgers Business School supply chain management professor. “Two-day deliveries, free returns, a…
Elon Musk probably said it best when the Tesla (TSLA) CEO declared, “the supply chain stuff is really tricky.”
Oh, you’d better believe it.
The supply chain—the network of people, organizations, and information that moves a product or service from its origin to the final customer—is crucial to the world’s economy, as it ensures efficiency and lowers costs.
The COVID-19 pandemic exposed just how fragile global supply chains are.
“For decades, we have grown accustomed to ever quicker deliveries with increasing methods of tracking,” said David Dreyfus, Rutgers Business School supply chain management professor. “Two-day deliveries, free returns, and omni-channel retailing have become the norm.”
So, he asked, what happened during this pandemic that caused our supply chains to play out of tune?
“You may remember that we ran short of ventilators, personal protection equipment, toilet paper, and computer chips,” Dreyfus wrote in a chapter of Reflections on the Pandemic: Covid and Social Crises in the Year Everything Changed.
“Instead of an isolated disruption, as is usually the case amid a natural disaster or war, this pandemic occurred almost simultaneously around the world.”
Dreyfus said the pandemic revealed the level of globalization and complexity of our modern supply chains—as well as the fragility.
“When any part of this chain breaks, disruptions are likely to follow,” he said. “War and inflation offer new disruptions. Better and more robust supply chain management principles should be adopted.”
Semiconductor industry executives are concerned about the global supply chain.
“Ultimately, our quest to manage the risk within businesses continues,” Dreyfus said.
The world’s economy has largely recovered from the pandemic, but supply chain concerns still linger.
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The semiconductor industry’s revenue is projected to hit record highs in 2025, with the Semiconductor Industry Association (SIA) and the World Semiconductor Trade Statistics (WSTS) calling for global chip sales to hit $700.9 billion.
This is one giant step toward the industry’s goal of $1 trillion in annual chip sales by 2030, and it is being driven primarily by booming demand for AI chips, data centers, automotive electronics, and consumer electronics.
However, industry executives are concerned about supply chain stability, energy security, and talent shortages, according to the 21st annual Global Semiconductor Outlook by KPMG LLP and the Global Semiconductor Alliance (GSA).