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

Vinay Ramani; Debabrata Ghosh; ManMohan S Sodhi

doi:10.1016/j.omega.2022.102720

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

Omega. 2022 Dec:113:102720. doi: 10.1016/j.omega.2022.102720. Epub 2022 Jun 29.

Authors

Vinay Ramani¹, Debabrata Ghosh², ManMohan S Sodhi³

Affiliations

¹ Department of Industrial & Management Engineering, Indian Institute of Technology Kanpur, Kanpur 208016, India.
² Essex Business School, University of Essex, Elmer Approach, Southend-on-Sea, SS1 1LW, UK.
³ Bayes Business School (formerly Cass) City, University of London, 106 Bunhill Row, London, EC1Y 8TZ, UK.

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.

Keywords: Automotive; Chips shortage; Covid-19; Electronic industry; Systemic disruption.