Thai Floods Cause Car Shortage!
"When a butterfly flaps its wings in one part of the world it can cause a hurricane in another part of the world."
At Youngzine we have followed the floods in Thailand. But did you know that the floods have touched not just the people of Thailand but each and every one of us?
Have you heard anybody use the phrase “The World is Flat”, and wondered if these folks need a little lesson in geography? We know it is not physically possible, however, when we look at the way the world is organized, how we live, buy and depend on stuff, we begin to notice how inter-connected, everything and everybody is around the world. A “Flat world” refers to the production, manufacturing and the global supply chain where each process is dependent on something else – making the world flatter or equal.
The Global Supply Chain
Assemblers outsource (buy or make elsewhere) parts from component or part suppliers, who can make them cheaper. Many parts are specialized and require expensive machines and can only be made in large batches (more than what a car assembler will ever need) to keep them cheap.
Thailand - a manufacturing hub
Over the last two decades, Thailand has become a hub of industrial activity and an important outsourcing center for critical parts for the Automobile and computer industry. So imagine if steering wheels are out of stock, because the factory in Thailand is submerged in water. Well nobody will buy a car without its steering and the entire production of cars will be held up until a replacement becomes available - the link in the chain of production gets broken.
The break affects not just the car assembler, but other part manufacturers who supply to the same assembler. Until the assembling process restarts, there is no need or demand for any other component. Imagine its impact on jobs, economy, goods, services etc which are all linked to that industry!
In the recent floods in Thailand, several manufacturing facilities including those of Nikon, Honda, Toyota, Seagate etc have been serioulsy affected with flood waters of over 3 meters at the facility for several days. Other component manufactureres of phones, electronic toys, and other household equipments have been affected as well. Workers and management have been scrambling to move critical machines and materials to higher levels. This holiday shopping season expect to see more "out of stock" signs on cameras, cars, and other electronic devices.
The world is more connected than we may think possible. Distant events suddenly become very relevant and local. The next time you go shopping for that electronic gizmo, do spare a thought for the flood victims of Thailand. They touch our lives in a lot more ways than we realize.
Watch the video to see the impact of the flood on computers.