Supply chain agility in semiconductor shortage

Abstract

The semiconductor shortage is an ongoing global crisis that has operationally and financially impacted companies’ supply chains due to the supply disruptions it caused. This crisis is a wake-up call for organizations to rethink agility in the supply chain. This Master’s thesis aims to study how supply chain agility can be utilized in disruption management during the semiconductor shortage. The conceptual framework of the thesis provides a link between the theories of supply chain agility and supply disruption management, which acts as a guideline for companies to plan agility in managing supply disruptions caused by the semiconductor shortage or similar crises.

This research was conducted based on qualitative multi-case study through semi-structured interviews with five companies from different industries. The case companies are those operating mainly in Finland, whose product offerings are associated with semiconductors. The collected data was analyzed with thematic analysis to identify the implications of agility elements at different phases of the disruption management cycle. The conceptual framework of the thesis was developed through a synthesis of existing literature and refined based on the empirical findings.

The findings suggest that it is important to apply supply chain agility in managing supply disruptions caused by the semiconductor shortage, due to this crisis's unpredictability and severity. In pre-disruption phase, successful implementation of proactive approaches requires alertness and accessibility enabled by risk management, market sensitivity and supply chain alignment. During and after the disruption, quick and flexible responses to sudden changes in supply are enabled by utilizing existing risk management practices in addition to operational flexibility and demand management. It is also important to have a recovery plan and to foster continuous learning from the crisis. Furthermore, maintaining agility throughout the whole crisis requires a culture of change, supportive top management, and strategic collaboration between supply chain partners as well as information technology capabilities.