Ford wants Tier 1 suppliers to prepare disaster plans

Article by Christian A., on October 14, 2014

Ford Motor Co. is urging its Tier 1 suppliers to prepare backup production plans for key plants to ensure that vehicle assembly remains undisrupted even if they are crippled. According to Ford purchasing chief Hau Thai-Tang, suppliers could adopt different strategies to ensure a smooth flow of parts.

For instance, if a plant is rendered inoperable due to fire, flood or labor strife, some suppliers might certify a site in another region for emergency production. Likewise, a supplier might keep an inventory in a warehouse of certain parts if they aren’t produced anywhere else.

Thai-Tang told Automotive News in an Oct. 3 interview that while rerouting parts from another region is “great,” the lead time is really long and the potential loss is very high. Because of this, Thai-Tang noted that stockpiling certain parts might be “worthwhile.”

He quipped that Ford has already requested one supplier to maintain an inventory of door trim for a regional variant of a certain model since there might be labor disruption in the area.

Ford is concentrating its risk management on its 150 largest suppliers that account for about 80 percent of its annual direct purchasing budget. Ford is not alone is asking suppliers to help them prepare for disasters.

For example, Toyota Motor Corp. is urging around 400 suppliers in North America to identify key parts produced by just one plant. Toyota has told its suppliers to create plans to shift output of such parts in case of fire, flood or earthquake. Similar plans are already in place at Chrysler Group, spokeswoman Katie Hepler disclosed. [source: automotive news - sub. required]

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