Good morning.
In four decades writing about business, I’ve always avoided stories about supply chains. Why? The title of a podcast series I tripped across recently says it succinctly, if cheekily: “Supply Chain is Boring.” Important, perhaps. Critical, even. And it can be lucrative, when done well. But boring.
Or at least it was, until people discovered last year that they couldn’t buy toilet paper. Or when they set out to get a new car and found none on the lot. Or if they watched the giant Ever Given block the Suez Canal or followed the wild ride in lumber prices. Suddenly, supply chain is no longer the dull details no one wants to dig into; it is a high stakes casino.
That’s true for CEOs, too, who once turned to contract manufacturers like Flex to avoid the boring details. Revathi Advaithi, who runs the global contract manufacturing firm Flex, and who was this week’s guest on the Leadership Next podcast, says now “every CEO is talking about de-risking their supply chain, supply chain resiliency, how do I get my components, and how do I make sure I get them forever without trade issues.”
Flex was number 499 on this year’s Fortune Global 500 list, and makes “a little bit of everything,” Advaithi says, “from medical products to consumer products to automotive components.” The last year changed the nature of her conversations with customers. “Many of them today are sitting down and saying, ‘I want to really understand where this is coming from… What are the sources of risk if there is a tsunami in Japan? If there is a weather issue in Texas, what does that mean to my supply chain?…And it’s happening in the C-suite.” Odds are such supply chain concerns will remain elevated, given geopolitical tensions and the prospects for ever more extreme weather.
You can listen to Advaithi’s full interview on Apple or Spotify, including the story of how she went from being an engineer to a CEO—and became one of only 23 women running Fortune Global 500 companies.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Move fast
Yesterday morning, the latest IPCC report landed like a thud. Now, businesses and governments are digesting the urgency of the findings, and how quickly we must act. Eric Lyman takes you through some of the takeaways for Fortune. “As much as any other sector, businesses benefit from a stable, predictable climate. The more we let the climate warm, the harder it is to adapt," says one expert. Plus, here's a behind the scenes look at the scientists behind the report, from Reuters.
Rising cases
COVID-19 cases are at their highest in the U.S. since February, averaging above 100,000 cases per day, as the Delta variant sweeps through the country. Vaccines have provided some protection—but only half of the U.S. population is vaccinated. Meanwhile, the Pentagon has said it will make vaccination mandatory for active-duty troops by the middle of August. New York Times
SoftBank decline
SoftBank was a rare company to announce a fall in Q2 profits. The Japanese conglomerate made $6.9 billion, which was also down sharply from a record breaking Q1; its Vision Fund alone lost $6 billion as buzzy tech investments cooled off. WSJ
Delta jab
Pfizer's partner BioNTech will start testing this month to see if it can make a vaccine that works particularly well against the ultra-contagious Delta variant. The clinical trial results should be ready at the end of the year, and will also test what combination of jabs would be most effective. If it works, the company says it can adapt production within 100 days. Fortune
AROUND THE WATER COOLER
EV boom
Electric vehicles are a hot commodity—except in the U.S. Data shows that Chinese consumers and Europeans are far ahead of the pack in embracing electric, which, incidentally, the IPCC says is key for meeting climate goals. Even still, it's going to take some coordinated effort to get Americans to give up the gas-fueled SUVs, Christiaan Hetzner writes. Fortune
Rolling the dice
Vegas is back. But America's "lopsided" attitude towards COVID-19, the Delta variant, and getting vaccinated, is threatening to derail the party. Visitors were back up to 2.5 million by this April, and much of the Strip looks like a mask-free 2019. But now, the city is struggling with staff shortages, and a lack of business travelers. FT
Post crazy?
The 'crazy' is leaving the U.S. housing market after more than a year, Fortune's Lance Lambert writes. But it's not a crash—it's more of a return to normal after plunging inventory and a boom in savings produced a turbo-charged housing market. Fortune
'Everyone is getting screwed'
Fortune's Erika Fry takes a deep dive into the pandemic and extreme-weather era for one Iowa couple, in this feature on the twists and turns of the property insurance market. "In a year when the recovery process in Iowa has been slowed and complicated by a global pandemic and a slew of natural disaster and pandemic-induced shortages, those pressures add to what many, including Jodi, describe as a second trauma: navigating the red-tape-ridden obstacle course to recovery," Erika writes. Fortune
This edition of CEO Daily was edited by Katherine Dunn.
