Companies like LG are applying TOC (but what's that?)TOC = Theory Of Constraints. Warning: this post is about the principles (theories) that guide strategic decisions ;-)
In line with Northmark's argument: today, computer chips are the contraint, tomorrow it will be batttery materials!
TOC, core idea – Every system has a limiting factor or constraint. Focusing improvement efforts to better utilize this constraint is normally the fastest and most effective way to improve profitability.
Question: Why didn't the car industry see the chips shortage coming??? How about:
materials supply has never been a constraint! But this is all going to dhange now! Companies like LG are
anticipating a battery materials shortage as a
realistic future weakest link!
Read more about the theory of TOC ...
https://www.tocinstitute.org/theory-of-constraints.html In the article: 'Once we have mastered how to utilize the chain well, we might begin searching for ways of strengthening the weakest link itself. Even a small increase in the strength of the weakest link could have a rather large impact on the overall strength of the chain...'.
And that's exactly what LG is working on right now!
In search for companies like SCY!