Major vehicle manufacturers are addressing new production challenges created by fluctuating demand and transition to new models by introducing idling programmes at plants in Europe and the US. However, the strategy can have the potential to threaten the supply chain when ramping back up to full production, advises emergency logistics specialist Evolution Time Critical. Designed to temporarily reduce production commitment through additional, pre-planned downtime as a short-term method for optimising costs and controlling vehicle supply, production idling enables vehicle manufacturers to respond to revised sales forecasts or pre-launch production rundown of outgoing models.
“The chosen method for phasing-in production idling is the predominant factor when assessing the potential supply chain impact,” explains Evolution Time Critical managing director, Brad Brennan. “The ability of vehicle manufacturers to operate more flexible production techniques is indicative of their evolving approach to supply chain management and appreciation of the benefits brought by streamlined, robust processes. However, during the operation of higher risk, emerging strategies, the use of a dedicated emergency logistics partner is able to safeguard against supply chain failure.
“Where production idling is planned or staggered any potential pitfalls can be proactively protected against, but a sudden reduction in activities can have more serious consequences for suppliers,” he continues. “This is especially prevalent with suppliers who operate a narrower focus and who work closely with a low number of vehicle manufacturers – a sudden drop in demand could account for a large percentage of their output, and resulting changes to scheduling and workforce could make a future return to full production a more challenging process.”
In isolation, the temporary idling of a production location need not have far-reaching consequences, but it has the potential to hamper the ability of affected suppliers to respond to a sudden increase in demand. “The one-to-one capacity and experience of an agile emergency logistics partner is vital to maintain longer-term operational efficiency,” explains Brennan. “Our ability to analyse supply routes and sources from existing and alternative production locations can provide vehicle manufacturers and their suppliers with a crucial time advantage if a swift restart to production is required, or if stocks must be clawed back due to conflicting lead times.”
Emergence of strategies such as production idling are typical of an automotive supply chain that is placed under increasing pressure. The time-contracted industry is experiencing fluctuating demand and, as vehicle manufacturers view their supply chain operations with growing importance, higher risk strategies are deployed. The acceptance by OEMs of the need to ensure robust supply chain activities and operate clearer visibility has led to the development of a more resilient supply chain supported by trusted premium logistics partners.