The semiconductor chip shortage that hit the automotive industry in late 2020 highlighted two lessons in supply chain management.
The first is the lack of upstream visibility remains the Achilles heel of supply chains. Firms often do not know their suppliers beyond those in Tier 1 and are thus prone to shocks in the upstream supply chain.
The second is the supply chain of each firm is not isolated but is connected with other supply chains in a vast global network. This reality was made painfully apparent by the continuing shortages of semiconductors, when companies in different industries (e.g., automotive and consumer electronics) found themselves vying for chips from the same suppliers.
The solution to these problems requires not only gaining visibility into the upper tiers of a firm’s supply chain but also assessing which suppliers are prone to greater risk from the rest of global network.
Our study of this problem used a large public dataset of supply linkages in the economy compiled by Factset Revere. It enabled us to map more than 690,000 supply chain links across 47,390 firms in the global economy from 2003 to 2017. Although the dataset is at the firm level and does not capture specific product-level linkages, our study revealed lessons. In this article, we illustrate our key insights with an example of the supply chains from five major chip manufacturers to seven major automobile manufacturers. (The seven include the combined Fiat and Chrysler, which merged in 2014.)
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Haissam Badih PhD, is the Researcher and Professor at the Department of Math and Computer Science at the Lawrence Technological University, Southfield, Michigan, USA. He earned His B.S. degree in Computer Science from the University of Windsor at Ontario Canada, his M.S. Degree from Lawrence Technological University, and a Ph.D. in Computer Science and Informatics from Oakland University in 2020. He will begin his academic career at Lawrence Technological University in 2021. He has worked in various software companies in software engineering and architecture.He authored numerous journal and conference papers that were peer-reviewed. His current research and development interests and activities in Project DIAMOnD for Automation Alley in blockchain for building a 3D printer marketplace for the supply chain to support all kinds of business, including 4.0 Industry. This work on blockchain for autonomous systems design, sensor fusion, intelligent agents, automation, human/machine interaction, robotic programming, and interfacing/coding. His research dissertation, entitled "Advance and specialize our application of blockchain for webcam/microphone access control" and "Add Blockchain in A.I. for communication," has worked within research on the Blockchain and Decoy deception research project. He worked on blockchain and decoy deception using smart contracts. This project utilized a Blockchain application that enforces limited access to webcam and microphone devices. We utilize Blockchain's Smart Contract to form a contract between the user's computer and another party connected via a network.
