Filenews 8 August 2021
The pandemic of the new crown has brought out many uncomfortable truths about society's overall readiness in the face of low probability events but with great impact, especially globally.
Such events, which are not particularly likely to occur, can range from issues exclusively related to pandemic preparedness (such as the domestic ability to produce personal protective equipment, respirators, disinfectants and vaccines), to issues that are much less internal, such as the ability of global supply chains to operate independently of the various pressures they are under.
The ability of global supply chains to operate independently of the various pressures they are under goes far beyond the issue of the supply of toilet paper that was addressed during the first phase of the pandemic. It expands and includes a whole range of products, such as timber and other building materials, tools, food, seeds, furniture, cleaning supplies, aluminium boxes, jars, swimming pools and pool equipment, chemicals, bicycles, camping tools, household appliances and spare parts for all kinds.
In many cases, too, supply chains have been squeezed simultaneously at both ends of supply and demand.
While the unplanned closure of production and distribution plants, border bottlenecks and workers sick with coronavirus have suffocated supply lines, people who are being "trapped" in their homes due to the health crisis have for months increased demand for a range of products.
Other such factors that have also caused disruption to supply chains include the storm in Texas in February, the six-day blockade of the Suez Canal due to Ever Given in March and the six-day closure of the Colonial gasoline pipeline in the United States following a cyber attack in early May.
At the same time, containers are being lost in record amounts for a variety of reasons, with more than 3,000 in 2020 and the number in 2021 already reaching 1,000 by the end of April.
The pandemic has shown us that global supply chains are quite fragile but also prone. This became particularly evident with chip production.
The demand for microchips
Prior to coronavirus, there was already a lot of pressure on the production of microprocessors, micro-processors, motherboards and similar components, due to limited global production capacity and larger product calls. The pandemic has put additional pressure on an already depressed segment, as bottlenecks in production and distribution have been met with increased demand from the pandemic.
Not long ago, disruptions in microchip production tended to affect only the manufacture of smart phones, tablets, computers, external hard drives and, more recently, flat-screen TVs.
Today, however, such disruptions also affect car production, as chips are increasingly used in hydraulic steering and brake systems, car entertainment systems and other components.
Indeed, both General Motors and Ford Motor Company have idled a number of factories in North America due to the global shortage of semiconductors. And as they are relatively new entrants to the microprocessor market, automakers don't have the influence that other buyers have, leaving them on hold when supplies run out.
The situation for automakers is expected to worsen as more and more consumer goods become smart via WiFi or Bluetooth.
The growing list of items requiring microchips is alarming, as these components are manufactured almost exclusively in some of the most dangerous places in the world, in terms of natural disasters: China, Japan, Taiwan, South Korea, Malaysia, Thailand, Philippines and California.
* From the naftemporiki.gr (with information from World Economic Forum)
