Bottlenecks in Global Supply Chains: Lessons from Rare Earths and Hard Disk Drives

Research from the Bank for International Settlements (BIS) indicates that supply chain concentration and limited substitutability can turn efficiency gains into vulnerabilities, with the consequences of bottlenecks depending on their underlying nature. The rare earth industry reflects persistent reliance on concentrated processing capacity, while hard disk drive production after the 2011 Thailand floods shows that flexibility and effective crisis management can accelerate recovery from temporary disruptions. Resilience measures must match the type of vulnerability: alternative capacity and technology can address persistent dependence, while inventories, supplier redundancy, and geographic flexibility can buffer temporary disruptions.