Understanding systemic disruption from the Covid-19-induced semiconductor shortage for the auto industry

Area of Science:

• Supply Chain Management
• Industrial Economics
• Disaster Management

Background:

• The COVID-19 pandemic caused unprecedented systemic disruptions across global industries.
• The semiconductor chip shortage significantly impacted the automotive sector starting in 2020.
• Understanding disruption propagation is crucial for industrial resilience.

Purpose of the Study:

• To analyze the dynamics of systemic disruptions using the automotive semiconductor chip shortage as a case study.
• To develop a thematic model illustrating the factors contributing to prolonged industry-wide disruptions.
• To demonstrate the propagation of supply chain disruptions across multiple sectors.

Main Methods:

• Thematic analysis of 209 newspaper articles related to the semiconductor chip shortage.
• Development of a stylized supply chain planning model to simulate disruption propagation.
• Running the supply chain model at different time points to observe impact over time.

Main Results:

• A thematic model was developed, highlighting the interplay of factors causing prolonged automotive sector disruption.
• The supply chain planning model demonstrated how disruptions propagate, leading to systemic shortages in the auto and other industries.
• The study distinguished between systemic, industry-wide disruptions and company-specific supply chain issues.

Conclusions:

• Systemic disruptions, exemplified by the chip shortage, have profound and lasting impacts on entire industries.
• The interplay of various factors can prolong disruptions, necessitating a holistic approach to supply chain risk management.
• This research contributes to supply chain risk literature by focusing on industry-level systemic failures rather than individual firm disruptions.