Trickle down suppliers

March 30, 2009

Nopherhole wants to remind you of the close integration of the local auto plant and suppliers.

Two plants are in the metropolitan area. One used to be the sole source of extended cab pickups for Ford. The other local plant has switched around to various GM brands.

But, on to the topic. The key to efficiency is called Just In Time inventory. The plant is not built big enough to store any parts in significant quantity. Suppliers are closely integrated with the plant and its output, so, for example, the brown leather seat with bun warmers arrives on the assembly line precisely when its needed for the white supercab pickup.

What does that mean to suppliers? If the plant shuts down, the supplier is immediately cut off and those jobs are gone too. And the plastics supplier that supplies the cup holders to the seat manufacturer, he is kaput also. And the wholesaler of plastic pellets that get molded into the cup holder loses orders. And the supplier of heaters that heat the plastic so that it can be molded into the cupholder for the seat that goes in the white supercab is SOL too.

nopherhole.com

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