Ford suspended all production Wednesday of its profit-driving F-150 pickup, the nation’s best-selling vehicle for more than 35 years, because of a “black swan” parts shortage. The production halt was caused by a fire May 2 at a parts factory in small-town Michigan that rippled through the North American auto industry but hit Ford hardest.
Joe Hinrichs, Ford executive vice president and president of Global Operations, acknowledged in a briefing late Wednesday, “We have to rebuild the whole supply chain.”
Continue reading about the event and its impact on Ford and other manufacturers, visit: www.freep.com/.
Observation
The risk and performance trade-off in the supply raises its ugly head again. Not a “black swan” event but rather a conscious decision to sole source due to cost and efficiency. The supply of radiator supports, another trivial but paralyzing component in the supply chain. For Japan, it was a $1.50 piston ring that paralyzed 70% of the Japanese auto industry. Market ramifications and implications to the industry value chain of lean manufacturing, sole sourcing, and other performance enhancements should be thoroughly understood, analyzed and monitored before returns are acknowledged. An opportunity for the competitors who adapted diversification as a strategy.