Integrated Supply Chain Management
According to a Associated Press article in this past Saturday March 5, 2011 edition of the Washington Post newspaper entitled Closure of Parts Plant Having Ripple Effect, "a fire that closed an auto parts plant near Detroit this week is now having ripple effects on five automakers, forcing two of them to close plants or cut production because they've run short of parts. The impact of the blaze, at a Magna International interior parts plant near Howell, Mich., shows how years of work to make auto plants more efficient can fall apart when something interrupts the flow of parts in an intricate supply chain. So far, the fire has forced General Motors and Mazda to stop making cars at some factories. The damaged Magna plant also makes parts for several Ford, Nissan and Chrysler Group vehicles. Ford, Nissan and Chrysler factories have stayed open, but it's uncertain for how long as Magna studies options to reopen the plant or make parts elsewhere. If the Magna plant, which makes ceilings, consoles and other interior parts, is closed for a long time, it could hurt the automakers' sales if inventories become depleted on dealer lots just as the big spring and summer auto sales months approach. For the past three decades, auto companies have cut costs and become more efficient by going to a just-in-time parts delivery system so they can avoid paying for parts stockpiles.”
What do you think? What can we in DoD learn from this? Although this particular scenario does not appear to directly impact the Department, could it? With proven and demonstrated capabilities of lean supply chains and just-in-time delivery, should we in DoD be concerned about a similar scenario? What are the longer-term implications of a similar “single point failure” such as a fire or natural disaster to a key integrated DoD supply chain? What are the implications for a Performance Based Life Cycle Product Support (PBL) sustainment strategy? And perhaps more importantly, how can these issues be more proactively anticipated, prevented, and the implications mitigated without sacrificing the benefits of supply chain efficiencies achieved by the DoD in recent years?
Food for thought.