OEMs begin plans for supply chain contingency fearing disruption from Icelandic volcanic eruptions


Emergency logistics expertise helps safeguard automotive industry production amid ash cloud uncertainty

“September is a traditionally busy period for automotive logistics as OEMs and suppliers work to replenish buffer stocks that have been heavily drawn on during seasonal shutdowns,” says Evolution Time Critical managing director, Brad Brennan. “Lean supply strategy and the requirement of a diversifying range of components to meet broadening model ranges, means that 2014 buffer stocks have needed to be smaller and therefore won’t stretch as far as in previous years.

“The possible threat of flight disruption means that it is crucial for vehicle manufacturers to work harder than ever to ensure contingencies are in place where possible,” continues Brennan. “The inflexibility of lead times provides an obstacle for suppliers keen to get ahead and protect against potentially disruptive flight cancellations. In such cases, the strategic use of emergency logistics expertise offers potential solutions to build up reserve stocks in advance, or find alternative routes during a crisis.”

Current forecasts are unclear as to whether a resultant ash cloud is imminent, but a number of OEMs are taking no risks, advises Evolution Time Critical. “We have spoken with a number of customers that are proactively looking at contingency planning to secure robust processes, as vehicle manufacturers and suppliers are increasingly aware of the cost of supply chain failure,” says Brennan. “The globalised production footprint of automotive supply chains means that the ramifications for being unprepared for widespread flight disruption could affect markets worldwide. The worst case scenario of utilising proactive contingency is that there is no direct impact from the Bardarbunga volcano, but OEMs are heavily protected against future supply chain nuances; whereas the cost of failure through lack of preparation could run into millions.”

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