Tuesday, March 29, 2011

Seriously, no diversification

Since the earthquake and Tsunami in Japan a few weeks ago, shortage of parts mainly for automobiles but other electronics have started to crop up. And this I really don’t get it, if a country like Japan has an out sizing effect on the shortages of critical parts, what could happen if for example China or India is hit by a major disaster. This also points to the fact that with all the knowledge and know how the business people have and study a simple item like the need to diversify has not crossed their mind. In the business school, they teach the students to diversify their portfolio, don’t put all the eggs in one basket, and always have a backup plan and then this Earthquake happens and we are facing a shortage of parts from Japan.

This just shows that despite the knowledge of doing business, we are still not yet prepared to diversify and branch out different parts from different areas of the world and just rely on one country to provide us with parts to complete our products. This is highly ridiculous and carelessness on the part of the corporations. With all the talk about having a broad vision about where your company should go, this myopic view of having a centralized and highly vulnerable place to have critical parts produced and shipped is not understandable by me at least.

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