MT Magazine January/February 2022

SUPPLY CHAIN ISSUE

FEATURE STORY

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“I think it is quite important,” Schuster answers. “But I also don’t think it is anywhere near the issue of semiconductors.” He adds, “I would say it is a 2 or 3 at this point.” Not bad. But not good. And potentially quite bad as OEMs work to make their vehicles lighter with materials including aluminum. What’s a Manufacturer to Do? While there is an argument to be made to shorten supply chains, perhaps to within the country’s borders, it isn’t a guarantee of no supply chain disruptions. Kristin Dziczek is the senior vice president of research at the Center for Automotive Research (CAR). She pays particular attention to manufacturing operations, and her word for what’s going on right now pretty much nails it: “Wonky.” ... her word for what’s going on right now pretty much nails it: “Wonky.” “Right now,” she says, “Even if a manufacturer doesn’t make something without a chip in it, it is impacted.” Even seat foam is impacted by the supply chain situation, Dziczek says. While there is something to be said for reshoring, Dziczek points out there are still problems. She references the Great Freeze in Texas. She points out that in April 2020, a tornado ripped the roof off a BorgWarner transfer case plant in Seneca, South Carolina, which put the factory out of production for five weeks.

In May 2018 there was a massive fire at a magnesium diecasting plant of a supplier (Meridian, which has subsequently filed for Chapter 7) that shut down plants of the Detroit Three – including the F-150 lines of Ford. Even Tesla had a fire in March 2021 in its diecasting operation in Fremont, California, which disrupted production. And there are things like labor disputes, such as the recent John Deere strike that shut down operations on Oct. 14, 2021, and lasted for over a month. All of this leads Dziczek to observe: “Reshoring is beneficial but not a solution.” Many Eggs. Many Baskets. What could be beneficial, Dziczek suggests, is what she describes as “many eggs in many baskets.” That is while supplier consolidation has been the approach taken, especially as manufacturers have taken on some of the characteristics of the Toyota Production System, including just-in-time, there has been a tendency to “lean out” the supply chain. Or said another way: to put more work at fewer suppliers. There is conceivably a benefit to both the OEMs and the suppliers. Until there is a sneeze – everybody gets a cold. A bad cold. Dziczek notes there is a looming issue on the supply chain front that probably isn’t getting the attention it deserves: Many of the materials that go into electric vehicle batteries come from places like the Congo (cobalt) and Indonesia (nickel). “We don’t know if that supply chain has been secured.”

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