Thai Flood, Intel & a Brittle Supply Chain

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Ariella
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Re: Thai flood and the impact on the supply chain
Ariella   12/13/2011 1:27:39 PM
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Hmm, I guess the media has its own version of most favored nation status.

Barbara Jorgensen
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Re: Thai flood and the impact on the supply chain
Barbara Jorgensen   12/13/2011 1:24:09 PM
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@Ariella--sadly this is true.  I did a little reality checking, and the flood got very little coverage from the usual media outlets--TV news, TV news Websites--compared with the Japan quake.

Bolaji Ojo
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Re: Thai flood and the impact on the supply chain
Bolaji Ojo   12/13/2011 11:10:50 AM
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It's not that the industry is unaware of the disaster, just that its impact isn't as widespread across the supply chain. Tablet PCs, for instance, don't have hard drives so Apple's supplies of components and assemblies for the iPad wasn't impacted.

Bolaji Ojo
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Re: Thai flood and the impact on the supply chain
Bolaji Ojo   12/13/2011 11:09:15 AM
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Barbara, Correct. The problem is Intel won't want to bear alone the cost of ensuring its customers would have all the hard disk drives they need. If it secures diversity of hard disk drives because it wants to sell microprocessors, then it would have to secure supplies of other components that go into the finished equipment, ranging from capacitors to connectors, power products, cooling fans, enclosures, packaging supplies, the list goes on and on.

In some ways it's easier to imagine such a system than to actually design and operate one. Each region and country wants a share of the global supply chain but none is perfectly suited to harbor everything without jeopardizing the entire structure. Political instability in China, for instance, could probably derail the entire global manufacturing economy but I don't think this is even being discussed. We are all hoping this would never happen. Let's pray too it doesn't because it would be the mother of all supply chain disruptions.

Ariella
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Re: Thai flood and the impact on the supply chain
Ariella   12/13/2011 10:37:15 AM
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Really, Barbara? The Thai flood was devastating to the area, not just the industry. I'm surprised people are so unaware of it.

Barbara Jorgensen
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Thai flood and the impact on the supply chain
Barbara Jorgensen   12/13/2011 10:02:49 AM
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When I talk to people outside the industry, the flooding in Thailand didn't even register. The Japan disaster got a lot of coverage--as it should have--but the Thailand event has had a greater impact on the electronics supply chain. Manufacturing still tends to cluster geographically--proximity to customers, etc.--but there has to be some diversification. The supply chain eliminated a lot of redundancy by moving to JIT and lean--but there's gotta be some leeway to put some back. There are many shuttered factories around the world that can be called into service. It's time consuming, but ultimately less expansive than a $1 billion loss.

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