Poor contingency planning puts supplier relationships under threat

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Automotive suppliers that dont conduct proper contingency planning in their logistics chain will come under increasing scrutiny by their OEM customers

Suppliers of vehicle components have worked hard to satisfy their demanding customers in meeting tight cost constraints and vigorous quality demands, but now the spotlight is focusing on what happens beyond the factory gates. According to emergency logistics supplier Evolution Time Critical, leading car makers are now asking their customers to demonstrate not only that they can ship components to schedule, but also that they have effective contingency planning in place in the event of a supply chain failure.

We provide high reliability, last minute shipments of car components around the world, says Brad Brennan, the companys managing director. Whereas once we might have provided those services on an ad hoc basis when problems occurred, an increasing number of our customers are now coming to us for help with contingency planning in advance of any supply chain disruption.

The reason for this change is simply customer demand, says Brennan. Car makers need to do everything they can with their supply base to keep production running and costs down. Theyve concentrated on improving quality and cutting costs in the past, now they want to ensure that logistics wont let them down. That means a cost effective, but robust supply chain.

Evolution Time Critical helps its customers to develop contingency supply chains by identifying the quickest possible alternative routes to ship components if the conventional supply chain fails. The company uses a wide range of different transport modes, from helicopter charter to high-speed road, and operates to and from destinations all over the world. We have a detailed knowledge of the cargo airports and routes near all the major automotive production centres, explains Brennan. So we can find fast, effective routes for anything from a wiring component to an engine.

In the past a supplier might simply have built larger buffer stocks to cope in the case of a supply failure, notes Brennan. But today they recognise that doing that is actually an expensive and risky approach. With hundreds of different component or module configurations they simply cant keep enough of everything in stock. Instead, they make sure that they can ship quickly in the event of a problem.

All the evidence suggests, says Brennan, that the requirement for a logistics contingency plan is likely to become standard practice over the next few years. If component suppliers arent making contingency plans now, Id advise them to start, he says. That way, theyll be prepared for when such planning becomes a prerequisite to doing business.

 

About Evolution Time Critical

Evolution Time Critical is exclusively dedicated to the provision of emergency logistics solutions for the automotive industry. Its expertise helps clients to overcome supply problems caused by manufacturing issues, scheduling changes or conventional transport delays, keeping production lines running and customers delighted.

Evolution Time Critical manages the full range of critical delivery modes, including aircraft charter, helicopters, onboard couriers, a dedicated 100 aircraft night freighter service covering 70 European airports, scheduled aircraft, and rapid road transport with local vehicles.

Over the past six years, Evolution Time Critical has worked miracles for many of the Worlds leading automotive OEMs, and numerous first and second tier suppliers.

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