Prof. Willy Shih and Wayne Ma discuss Apple's reliance on China for iPhone manufacturing, the challenges faced by the tech giant, and the strategic moves to maintain their relationship. They delve into Apple's diversification struggles, competition with Huawei, and China's response to US bans while exploring the evolving tech landscape.

After decades of industrial policy that favored globalization and free trade, we are entering a new era. Prompted by the pandemic, climate change, rising geopolitical tensions and economic concerns, countries and groups of countries are once again using the power they have to intervene in the private sector, whether it's investing in drug development, offering clean energy tax breaks, or incentivizing domestic manufacturing. Harvard Business School professor Willy Shih wants to help corporate leaders navigate these changes in a way that protects their businesses, workers, and customers. He explains the new challenges - as well as opportunities. Shih wrote the HBR article, "The New Era of Industrial Policy is Here."

Harvard Business School professor Willy Shih discusses choosing manufacturing locations using a case study about Fuyao. Topics include production costs, inventory management, risks like customs delays and labor strikes, and evaluating cross-cultural management in global strategy.

Since the beginning of the pandemic, the demand for microchips has far exceeded supply, causing problems in every industry that relies on computers. And if you’re a Decoder listener, you know that that is every industry. Right now, major automakers have unfinished cars sitting in parking lots waiting for chips to be installed. Game consoles like the PS5 and Xbox Series X are impossible to find. And even things like microwaves and refrigerators are impacted, because they contain simple controller chips. So we realized it was time to figure out what caused the chip shortage, why that happened, and how we are going to get out of it. My guest today is Dr. Willy Shih. He’s the professor of management practices at Harvard Business School. He’s an expert on chips and semiconductors — he spent years working at companies like IBM and Silicon Graphics. And he’s also an expert in supply chains — how things go from raw materials to finished products in stores. Willy’s the guy that grocery stores and paper companies called in March 2020 when there was a run on toilet paper. If anyone’s going to explain this thing, it’s going to be Willy.Links:What toilet paper can teach us about supply chains https://www.youtube.com/watch?v=ihd7XJMzdG4The latest in the global semiconductor shortage https://www.theverge.com/2021/4/2/22363232/global-semiconductor-chip-shortage-pandemic-consoles-cpus-graphics-cards-carsFord to build some F-150 trucks without certain parts due to global chip shortage https://techcrunch.com/2021/03/18/ford-to-build-some-f-150-trucks-without-certain-parts-due-to-global-chip-shortage/Situation regarding semiconductor plant fire and product supply https://www.akm.com/us/en/about-us/news/information/20210122-information/Samsung forced to halt chip production in Austin due to power outages https://www.theverge.com/2021/2/17/22287054/samsung-chip-production-halted-austin-winter-storm-uri-power-blackouts About that White House meeting to discuss the semiconductor supply chain https://www.forbes.com/sites/willyshih/2021/04/12/about-that-white-house-meeting-to-discuss-the-semiconductor-supply-chain/?sh=63b7f65b1641 Ford CEO Jim Farley on building the electric F-150 -- and reinventing Ford https://www.theverge.com/2021/5/20/22444294/ford-f150-lightning-pickup-truck-jim-farley-interview Senate approves billions for US semiconductor manufacturing https://www.theverge.com/2021/6/8/22457293/semiconductor-chip-shortage-funding-frontier-china-competition-act Intel invests $20 billion into new factories, will produce chips for other companies https://www.theverge.com/2021/3/23/22347250/intel-new-factories-arizona-20-billion-chips-outsourcing-foundry-services-manufacturing Apple supplier TSMC confirms it’s building an Arizona chip plant https://www.theverge.com/2020/5/14/21259094/apple-tsmc-factory-chips-arizona-a-series Biden-⁠Harris Administration announces Supply Chain Disruptions Task Force to address short-term supply chain discontinuities https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-sheet-biden-harris-administration-announces-supply-chain-disruptions-task-force-to-address-short-term-supply-chain-discontinuities/ Water shortages loom over future semiconductor fabs in Arizona https://www.theverge.com/22628925/water-semiconductor-shortage-arizona-droughtTranscripthttps://www.theverge.com/e/22412413 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Willy Shih, professor at Harvard Business School, says that the complex, global, and just-in-time manufacturing processes we've developed in recent decades are highly susceptible to breakdowns, especially during a global pandemic. He explains why the shortages we’ve seen in 2020 - in goods from toilet paper to appliances - are indicative of a bigger problem and talks through ways can businesses protect themselves and consumers in the future. Shih is the author of the HBR article "Global Supply Chains in a Post-Pandemic World."