Automaker Supply Chains Are Strained. We Know the Solution

By Logan Wamsley

It is easy to view supply chain disruption in strict terms of dollars and cents, of profits made and losses accumulated, but consequences go far beyond that. Adjusting priorities and production delays is one thing, but human consequences are quite another.

Such consequences can be easily seen today in automaker supply chains, which have recently been a regular staple of the global news cycle. Some recent headlines include:

Audi announced, due to significant production shortfalls in the first quarter of 2021, more than 10,000 employees are expected to be furloughed.

Volkswagen reported that almost 19,000 workers in their UK factories will see reduced hours due to expectations of producing 100,000 fewer vehicles than originally expected in the first quarter of 2021.

Ford reported that both plants that manufacture its flagship F-150 truck, one in Dearborn, Michigan and the other in Kansas City, Missouri, will see significant hour reductions for at least a week. Additionally, Ford announced that workers can expect a reduction in profit-sharing payouts by as much as 45%.

Honda, for the third time in two months, was recently forced to shut down production at its plant in Swindon, UK. Vauxhall, Jaguar Land Rover, and Nissan, who all maintain factories in the UK, have each made cuts as the production of semiconductors continues to be limited.

General Motors in February announced that it will halt production entirely in plants located in Fairfax, Kansas, Ingersoll, Ontario, and San Luis Potosi, Mexico. Additionally, its Bupyeong 2 plant in South Korea will operate at half capacity.

In a business landscape that is more than ever emphasizing stakeholders as well as shareholders, companies, regardless of industry, are increasingly under the microscope to provide for their workforce. When devising a supply chain strategy that properly accounts for potential disruptions, the effect this may have on livelihoods across the globe needs to be taken into account.

Partstat inventory management solutions allow organizations in industries ranging from consumer electronics to healthcare to automotive to preserve their supply chains and maintain business continuity through any known risk, including semiconductor shortages. Instead of operating under a just-in-time inventory model, customers can utilize Partstat’s purchasing power to acquire all the inventory necessary to meet their production demands — without sacrificing any upfront working capital. Large, bulk purchases on the front end also put into play significant purchasing discounts from the manufacturer that are not available in a just-in-time-inventory model, a feature that can be extremely valuable to automaker supply chains.

For more information on how a Partstat inventory management solution can fit into your supply chain, contact a Partstat inventory specialist today at sales@partstat.com!