A Chip is Not a Chip

<p>In 2019 manufacturers were struggling to onboard and retain important workers, to obtain supplies when needed, and to meet the level of performance that customers demand. </p><p>And then Covid hit.</p><p>"It's the supply chain" became the phrase to indicate the problems are out of our control. It meant "don't expect a good answer from us" and "don't expect on-time in-full deliveries."</p><p>Packaging, whether plastic or metal or even treated cloth, was in short supply. At least in the size and configuration some needed.</p><p>We all remember the toilet paper shortage, but how many understand that it due to a shift in demand from industrial to residential? The materials, production processes, packaging and shipping are very different for the two sources of demand.</p><p>Chips continue to reflect inadequate supply; at least a few do. But others are in such surplus that major producers like Intel are laying off and putting the brakes on production as customers admit to hording and cancel the huge orders they had on the books. </p><p>That industry -- the electronic parts industry in general -- has long been known for these huge swings. Those historical swings have been for very similar reasons. Rapidly increasing demand that can't be met; skyrocketing orders; skyrocketing production; and then cancelled over-ordering, and plummeting production. Because capacity cannot be quickly and smoothly adjusted in those industries, wild swings are simply "the way it is."</p><p>While leadership concentrates on the strategic level, execution requires attention to detail. </p><p>In conditions of multiple challenges confronting us simultaneously, we tend to simplify by relying on stereotypes, or generalities, that have no real meaning in execution.</p><p>"Chips are in short supply" or "plastics are in short supply" has little meaning at the detail level. There, the detail matters greatly. The strategic decisions of suppliers matter greatly. </p><p>Leaders can help those involved in execution understand supplier strategies, talk w