FEaTuRE Procurement
Missing Parts
By Monica Liau
t was only recently that manufactur- shortfalls due to the inability of their over-
I
ers, warehouses and retailers were seas supplier to provide enough parts. What
complaining about excess inven- happened?
tory, but unfortunately for some, Given the ongoing economic slowdown, it
the recent promise of recovery may seem strange that suppliers are unable
has created a new problem: today some sec- to keep up with demand, and some have al-
tors are experiencing global parts shortages. ready identified culprits. For example, Ritesh
The automotive industry was especially hard Bijoria, a head supply chain director based in
in the market, it may not be a problem that
hit, with big names like India’s Tata Motors, Bangalore, says that origins of the problem
can be resolved soon.”
Chevy and GM all announcing delays and are widespread and originate in the way many
temporary shutdowns in certain factories companies reacted to the economic reces-
Origins
due to lack of parts. Another hard-hit sector sion. “The deliberate compromise on quality
The problem originates in the fact that
is the Graphics Processing Unit (GPU) busi- of service and high focus on cost reduction
certain industries decided or were forced to
ness, where both nVidia and ATI, AMD’s of manufacturers is the reason behind the
cut back on capacity and employees in order
graphics division face severe production clog,” he says. “With the current fluctuations
to survive the economic recession. Especially
42 JANUARY/FEBRUARY 2010
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