Automotive Supply Chains Risks and Mitigation Strategies
Automotive Supply chains risks and mitigation strategies
The auto industry has been a global business for a long time. This year has made it clear just how much a problem in just one of those regions, however, can affect everyone in the product chain (Miel, 2011)…
Lall (2009) classified supply chains risk into different types depending on their origins. These include demand risk, internal risk, and external environment risk.
External Environment
These risk elements are external to and uncontrollable from the firm’s perspective. Examples include blockades of ports or depots, natural disasters such as earthquakes, hurricanes or cyclones, war, terrorist activity, and financial factors such as exchange rates and market pressures. These events disrupt the flow of material and may lead to plant shutdown, shortage of high-demand items, and price increases (Lall, 2009).
Natural calamities
The clearest lesson from Auto supply chains came in March, when the double disasters of earthquake and tsunami in Japan killed thousands and also impacted manufacturing for weeks. It was reported that GM had to halt production of vehicles at several plants, due to parts shortages from Japanese suppliers. Toyota has suspended production of parts in the mother country that were intended to be shipped overseas. Finally, most Japanese automotive assembly plants remain closed (Mojonnier, 2011)… Except that, there were floods in the northeastern United States that disrupted shipping and tornados throughout the Midwestern U.S. -- including one that damaged Toyoda Gosei North America Corp.’s Hopkinsville, Ky., plant, among other sites(Miel, 2011)…
Miel (2011) also claimed that disasters can come in smaller versions when it comes to supply chain interruptions. A March 2 fire extensively damaged Magna International Inc.’s molding plant in Howell, Mich., forcing the company to scramble to make sure it could get parts to customers without forcing those customers to shut down. The company
The auto industry has been a global business for a long time. This year has made it clear just how much a problem in just one of those regions, however, can affect everyone in the product chain (Miel, 2011)…
Lall (2009) classified supply chains risk into different types depending on their origins. These include demand risk, internal risk, and external environment risk.
External Environment
These risk elements are external to and uncontrollable from the firm’s perspective. Examples include blockades of ports or depots, natural disasters such as earthquakes, hurricanes or cyclones, war, terrorist activity, and financial factors such as exchange rates and market pressures. These events disrupt the flow of material and may lead to plant shutdown, shortage of high-demand items, and price increases (Lall, 2009).
Natural calamities
The clearest lesson from Auto supply chains came in March, when the double disasters of earthquake and tsunami in Japan killed thousands and also impacted manufacturing for weeks. It was reported that GM had to halt production of vehicles at several plants, due to parts shortages from Japanese suppliers. Toyota has suspended production of parts in the mother country that were intended to be shipped overseas. Finally, most Japanese automotive assembly plants remain closed (Mojonnier, 2011)… Except that, there were floods in the northeastern United States that disrupted shipping and tornados throughout the Midwestern U.S. -- including one that damaged Toyoda Gosei North America Corp.’s Hopkinsville, Ky., plant, among other sites(Miel, 2011)…
Miel (2011) also claimed that disasters can come in smaller versions when it comes to supply chain interruptions. A March 2 fire extensively damaged Magna International Inc.’s molding plant in Howell, Mich., forcing the company to scramble to make sure it could get parts to customers without forcing those customers to shut down. The company