Understanding systemic disruption from the Covid-19-induced semiconductor shortage for the auto industry. (December 2022)

• Record Type: Journal Article
• Authors: Ramani, Vinay; Ghosh, Debabrata; Sodhi, ManMohan S.
• Is Part Of: Omega. Volume 113(2022)
• Publication Date: 2022-12
• Subjects: Systemic disruption -- Covid-19 -- Automotive -- Chips shortage -- Electronic industry; Management -- Periodicals; 658.4005
• DOI: 10.1016/j.omega.2022.102720
• Languages: English
• ISSNs: 0305-0483

Abstract

Highlights: Systemic disruptions cause shortages within a sector and across sectors. We seek to understand the disruption of Covid on the auto industry hit by chips shortage. A thematic analysis of 209 news articles brings out various causes and effects. A stylized LP model with sequential scenarios illustrates impact within and across sectors. Abstract: Covid-19 has allowed us to study systemic disruptions that impact entire industries. This paper explores how disruptions start, propagate, and continue over time by examining the semiconductor chip shortage faced by the auto industry during the years following Covid-19 in 2020. First, we carried out a thematic analysis of 209 pertinent newspaper articles. The analysis resulted in a thematic model of such disruptions with the interplay of various factors leading to the prolonged disruption to the auto sector. Second, we present the results from a stylized supply chain planning model run at different times to show how disruptions propagate to the auto and other sectors, causing systemic shortages. Overall, we contribute to the supply chain risk literature by focusing on system disruptions impacting entire industries versus normal disruptions affecting a particular company's supply chain.