Supply Chain Weekly Wrap-Up 04/02/2021 – 04/08/2021

Heinz ketchup shortage due to COVID-19

The latest shortage due to the Coronavirus pandemic is ketchup, and it’s hitting America’s most popular brand, Heinz, with shortages at chains like Long John Silver’s and Texas Roadhouse. Small individual packages restaurants hand out with pick-up and Drive-Thru orders are being affected, more so than bottled ketchup.

The company made strategic manufacturing investments at the start of the pandemic to keep up with the surge in demand for ketchup packets driven by the accelerated delivery and take-out trends. One reason for the shortage is that restaurants are also using the packets when consumers are dining in, in order to avoid using or sharing items that are reusable such as menus, condiments and any other food containers.

Heinz said that when overall restaurant demand plunged at the beginning of the pandemic, it saw the shift to takeout and delivery and pivoted to prioritize production of products. It said it scaled back on less popular varieties and added extra product shifts, but demand was still greater than supply.

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Over 80% of companies with factories in Japan to diversify supply chains due to pandemic

More than 80% of companies with factories in Japan have started diversifying their supply chains as the pandemic and other disruptions highlight the risks posed by highly streamlined production processes, according to a recent Nikkei survey. Top executives at large Japanese companies were surveyed.

Lockdowns and business closures caused by the pandemic brought production to a halt in China and elsewhere during the early stages of the pandemic. Many automakers cut production due to a lack of parts, while supplies of masks and medical equipment were depleted across the world.

“We cannot offset every single risk in the world by globalizing supply chains, but we can bolster our ability to recover from a crisis.” Fujitsu CEO Takahito Tokita said. Subaru are also set to build a new transmission factory in the US in 2023 so it can assemble cars in the country without relying on Japanese-made parts.

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Acer sees global chip shortage gradually easing

According to PC vendor Acer, the global shortage of chips for mid-end consumer products is beginning to ease and will be much better come the second half of the year. From delayed car deliveries to a supply shortfall in home appliances to costlier smartphones, businesses and consumers across the world are facing the brunt of an unprecedented shortage in semiconductor microchips.

Originally concentrated in the auto industry, the shortage has now spread to a range of other consumer electronics, including smartphones, refrigerators and microwaves. The problem first became apparent in the fourth quarter of last year and the supply chain has since jumped into action as suppliers worked to address the situation.

Hou said better supplies in the second quarter compared with the first quarter of this year are expected, and that the situation in the second half will be better than the second quarter. The shortage stems from a confluence of factors as carmakers, which shut plants during the pandemic last year, compete against the sprawling consumer electronics industry for chip suppliers.

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Have a good weekend!