Supply Chain’s Achilles’ Heel: Collaboration
Posted 03-04-2010 at 01:12 PM by Albert Fong
Vehicle recalls continue to litter the landscape, and you’ve either become desensitized to all the announcements or worried because the vehicle is sitting in your garage as we speak. While we’re well aware of Toyota’s problems, GM and Nissan have announced their own recalls over the past week covering everything from steering wheels to internal fuel sensors. This begs the question: Where does the blame lie?
The answer depends on who you ask and to no surprise, Toyota was quick to lay blame with suppliers. I would anticipate similar responses from the others as well because it is easier to lay blame on others than be fully accountable. The fact is that companies need to assess their own internal policies because the potential problem and the resulting blame tends to be relatively nearby. When it comes to a recall of any magnitude, blame is a two-way street. These companies especially Toyota have adopted manufacturing processes that relied heavily and place responsibility for major components and systems on single suppliers. While cost effective, the approach sacrifices the need for redundancies and quality control. Add to that the pressures for increasing margins and profitability, and you have a recipe for disaster.
The Japanese’s just in time approach has been discussed and emulated to varying degrees over the decades. But, a core component—collaboration—seems to have been overlooked or ignored. The reliance on regular communications and strong relationships with suppliers is particularly important because just in time is highly susceptible to disruptions whether internal or external. In Toyota’s situation, it’s clear that collaboration was minimal, and don’t be surprised if that’s also a weakness with GM, Nissan, and any other large company. No matter what you call your manufacturing process, be it lean, green or just in time, collaboration is essential.
And, regardless of where the blame lies, one thing is for certain: you live and die by the supply chain.
The answer depends on who you ask and to no surprise, Toyota was quick to lay blame with suppliers. I would anticipate similar responses from the others as well because it is easier to lay blame on others than be fully accountable. The fact is that companies need to assess their own internal policies because the potential problem and the resulting blame tends to be relatively nearby. When it comes to a recall of any magnitude, blame is a two-way street. These companies especially Toyota have adopted manufacturing processes that relied heavily and place responsibility for major components and systems on single suppliers. While cost effective, the approach sacrifices the need for redundancies and quality control. Add to that the pressures for increasing margins and profitability, and you have a recipe for disaster.
The Japanese’s just in time approach has been discussed and emulated to varying degrees over the decades. But, a core component—collaboration—seems to have been overlooked or ignored. The reliance on regular communications and strong relationships with suppliers is particularly important because just in time is highly susceptible to disruptions whether internal or external. In Toyota’s situation, it’s clear that collaboration was minimal, and don’t be surprised if that’s also a weakness with GM, Nissan, and any other large company. No matter what you call your manufacturing process, be it lean, green or just in time, collaboration is essential.
And, regardless of where the blame lies, one thing is for certain: you live and die by the supply chain.
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