Just in time production in the era of silicon shortage

The world interconnected with the silicon chips

"Just in time" production crumbled in the silicon shortage turmoil. So, what next?

Well, let's be honest everyone trembled because of the silicon shortage in the last 5 years.

The evident reliance on semiconductors in cars, smartphones, and even household appliances left dismal consequences across the board. Basically, no sector sailed through the storm without a dent.

There is not a single reason for this problem; it's a combination of pandemic-related disruptions, surging demand for electronics, and geopolitical tensions, which created the perfect scenario for the problem.

In the peak of the shortage, I have seen second-hand Arduino Uno sold for £500 on eBay, and bid wars for common products were the rule, not the exception...

The "just in time" manufacturing had a very hard time in the storm. The underlying assumption of this approach, which allows keeping inventory to that minimum, is: in the globalised world everything is available at a snap of the fingers. However, In this case, those assumptions were painful and untrue, and companies had to undergo unprecedented delays in their production.

I am not sure if things could have been foreseen or at least mitigated, but it's safe to say that a major adjustment will be adopted to avoid this again.

The shortage exposed vulnerabilities in supply chains, but it also catalysed innovation and investment in semiconductor manufacturing. West countries poured billions into Initiatives like the U.S. CHIPS Act and Europe's efforts to ramp up local production to signify a pivot toward self-sufficiency.

Unfortunately, the danger is not over. We are going into an era where AI, IoT, and electric vehicles are going to be ever more present. Scaling up production while building a more resilient ecosystem is going to be challenging.

I am definitely looking forward to seeing how these new measures and challenges will shape industrial production, and see how the adaptations will change the "just in time" style of production.

What are your thoughts on the silicon shortage? How has it impacted your industry, and what do you see as the path forward?