Don't Repeat Mistakes That Led to the Microchip Shortage

The great microchip crunch that has squeezed the auto industry should be mostly over by the middle of this year. But carmakers shouldn't be so quick to forget the crisis' lessons: Not only will there be a next time, but that next time will likely be worse.

The shortage has brutally exposed vulnerabilities in the just-in-time production model that has become gospel for the industry. It's also a wake-up call for automakers used to having volume leverage on suppliers. Manufacturers are not in the position to call the shots when many semiconductor producers have customers in the larger consumer technology sector eager to grab available production slots.

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