The 10th Automotive Logistics Europe conference saw increased pipeline visibility, supply chain design and risk management placed firmly at the top of the agenda
The 10th Automotive Logistics Europe conference, held in Bonn, Germany, put increased pipeline visibility, supply chain design and risk management at the top of the agenda. In a difficult economic environment, executives emphasised the need for more control of the supply chain to help lower costs, make better sourcing decisions and mitigate disruptions.
Reflecting on the lessons learned following the natural disasters last year in Japan and Thailand, top level purchasing executives from Ford and General Motors’ European divisions spoke about how to mitigate risk in the supply chain. Alan Draper, vice-president of purchasing, told delegates that although Ford had minimal disruption to manufacturing following the crises, it required a significant effort on the part of the logistics and supply chain functions to overcome the situations and to make the necessary adjustments.
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“In the days that followed the Japanese earthquake, our assessment showed that there were 77 facilities and 110 parts suppliers that were affected, which would impact around 850 finished components for Ford,” he said. “In short, it was a potentially disastrous situation.”
Many of those impacted were electronic and microchip suppliers at the tier two or three levels. During the floods in Thailand, stamping dyes were under water, affecting plants as far away as South Africa. Draper explained how his supply chain teams began a process of tracking every part to make decisions about re-sourcing, alternate production or premium freight to maintain inventory levels. Ford has also developed a global risk chart to assess and monitor potential danger zones and has drawn up a critical list of suppliers, including those operating close to capacity even in normal times.