Nothing Playful About Supply Chain Glitches

Sometimes it seems like the more people talk about supply chain management, the tougher it gets to actually follow the plan through.

Take Sony, for instance. In Manufacturing Insights' Theory & Practice newsletter, Bob Ferrari writes, "Last week, Sony announced that problems in volume-manufacturing of blue laser diodes would cause an additional delay to shipments , and will force the company to half the previous number of consoles, from the previous planned 4 million, to now 2 million units. Thus only half as many consoles will be available for both Japan and U.S. markets, and shipments to Europe will be delayed until March 2007." (Read the rest of the article here.)

The basic problem here: Sony can't make enough of these game systems because it doesn't have enough of the right components. Sounds like a classic case of design not talking to manufacturing, and vice versa, right?

Well, yes, but wait till you hear the rest of the story: The very same thing happened to Sony six years ago, with the launch of the PlayStation2.

As reported at the time in SUPPLY CHAIN TECHNOLOGY NEWS, Jan. 2001 (which I was editing at the time), Sony's initial U.S. shipment of PlayStation2's for the Christmas 2000 season was 500,000, exactly half of the original projections of 1 million units. The culprit for the severe cutback in production was a components supply shortage that resulted from a "process migration" from a .25-micron chip to a .18-micron chip at a fab facility.

The more things change, the more they don't change at all.

These types of supply chain glitches aren't just found in the high-tech industry, of course (and let's not forget that Microsoft had problems producing enough X-Box's a year ago, while Apple weathered parts shortages with its iMac G5). Check out this story about Cadbury-Adams' problems making enough recloseable packs for its Trident gum. Gives you something to chew on, doesn't it?