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Why Ford’s Manufacturing Problem is Yours, Too

Ford Motor Company has made a big fuss about the semiconductor shortage. They simply can’t get enough semiconductors to make enough vehicles to meet the demand. Well, they’re not the only ones who can’t meet demand. Here’s how you’re being toppled as the dominoes fall.

This is related to the chip shortages we’ve been experiencing for the better part of the last two years. That caused a scarcity of computers at a time when companies were upgrading hardware to run Windows 10 and then when families scrambled to get computers for online schooling.

Now we have a shortage of semiconductors, which are used in all motor vehicles of all sizes as well as home appliances ranging from microwave ovens to refrigerators to washing machines. We’re also facing shortages of building materials because of all the remodeling and home renovations we’re doing during the pandemic. What that means for anyone doing a major project and upgrading technology is that you’re going to wait a long time to complete your projects, and they’re going to cost a lot more.

What’s happening is that we’re being caught by the law of supply and demand – the first rules you learned about in economics and probably haven’t given much thought to in a long time. Just like with Ford Motor Company, you’re now having to wait a longer time for things you need, and you’re paying more money for them. If you need technology for work or business, your productivity is suffering. If you felt like you were caught between a rock and a hard place before, they’ve tightened their grip

A client who relies on laptop computers for field service techs is caught in one of those untenable situations. The software that makes it all work is tied to Windows 7 – which is still usable but far from ideal. We can’t backload the software onto newer computers because we can’t backload Windows 7 onto them. They really need older, rugged Windows 10-compatible computers, but they’re not readily available – and there’s one more law: the law of diminishing returns.

At some point, it costs more to run old equipment than it does to buy new stuff. The biggest factors are that it becomes harder if not impossible to find parts or tweak the operating system or application software. At the same time, the units’ performance decreases to the point that it affects a company’s bottom line. Supply chain and manufacturing issues have turned these problems into much larger ones.

Another client, who has a Mac, got a PC back from an employee who left the company. The PC is newer, but because everything was stored just on the Mac, we needed to load everything into the cloud and then bring it back to the PC.

That incident reminded me of how our systems have evolved in my time as an IT professional. I used to carry big notebooks and CDs to install drivers and other types of system software as needed by clients. Then, we didn’t need the cases of CDs because we had thumb drives that plugged into a USB port. Today, it’s hard to find a computer that has a CD drive. The cloud is making them extinct.

The cloud is also more efficient. By being able to upload all manner of data and application software to a server, where it can be stored until it’s needed and then downloaded, we’ve dramatically cut the time it takes to do our work. No matter how much somebody might have saved by keeping old equipment and workflows in place, the time has come where the lack of productivity is costlier than the equipment. Shortages of equipment or higher prices make the problems costlier.

Everyone needs to take stock of their technology now, no matter how old or new it is. If you haven’t reached the point of diminishing returns, it may be closer than you think. Even if your technology is fairly new, you need to have a plan to phase in replacements in the most cost-effective manner. That means you need to shop continuously to budget for the most advantageous time to make your moves.

We can help. Call us – 973-433-6676 – or email us to set up a technology assessment and replacement program. You’ll maximize your cost-efficiency and avoid the catastrophic effects of the law of supply and demand.