February 2021 Archive

February 25, 2021
Biden orders a review of US supply chains for vital goods

President Joe Biden signed an executive order Wednesday intended to boost manufacturing jobs by strengthening U.S. supply chains for advanced batteries, pharmaceuticals, critical minerals and semiconductors. “It’s about resilience, identifying possible points of vulnerabilities in our supply chains and making sure we have the backup alternatives or workarounds in place.”

February 24, 2021
Consumer Demand Snaps Back. Factories Can’t Keep Up. (WSJ)

Supply chains typically get beaten up during recessions. As sales decline, companies draw down inventories to conserve cash instead of purchasing more parts and materials. Entire pipelines of supplies get cleaned out. When demand improves, even modestly, suppliers respond with an outsize increase in production to restock empty warehouses and assembly plants. The so-called bullwhip effect ripples all along supply chains, generating unusually large orders for suppliers that are far from end customers. This time, the bullwhip effect is even more pronounced because demand for consumer products has been extraordinarily high. At the same time, companies are placing supersize orders to compensate for the extra time it takes to procure supplies from factories and freight operators constrained by global efforts to contain the coronavirus. That’s exacerbating the strain on supply chains.

February 17, 2021
Apple Is the $2.3 Trillion Fortress That Tim Cook Built (Bloomberg)

Cook’s global supply chain greatly improved upon the fabrication approaches that Dell and Compaq had developed. The big PC brands often outsourced both manufacturing and significant design decisions, resulting in computers that were cheap but not distinctive. Cook’s innovation was to force Foxconn and others to adapt to the extravagant aesthetic and quality specifications demanded by Jobs and industrial design head Jony Ive. Apple engineers crafted specialized manufacturing equipment and traveled frequently to China, spending long hours not in conference rooms as their PC counterparts did but on production floors hunting for hardware refinements and bottlenecks on the line.

Contract manufacturers worked with all the big electronics companies, but Cook set Apple apart by spending big to buy up next-generation parts years in advance and striking exclusivity deals on key components to ensure Apple would get them ahead of rivals. At the same time he was obsessed with controlling Apple’s costs.

February 12, 2021
Why vaccine production is taking so long (Axios)

COVID-19 vaccine makers are under intense pressure to rev up production, but the scale of the challenge is unprecedented — and the speed of production is limited.

February 11, 2021
Behind AstraZeneca’s Covid-19 Vaccine Stumble (WSJ)

A production problem at a single factory in Belgium has delayed tens of millions of doses destined for Europe, endangering the continent’s already-slow inoculation drive and representing the greatest threat so far to Dr. Soriot’s extraordinary pledge last year to vaccinate the world—and do so for no profit. After disclosing the European problem, the drugmaker now says it has been troubleshooting similar production issues in recent weeks as far away as the U.S. and Australia.