Airflow Sensor shortage from Japanese supplier and auto OEM impact

A Wall Street Journal article (March 24, 2011) describes the supply chain impact of part shortages from a Japanese company, Hitachi Automotive, that has a 60 % world market share of mass airflow sensors that measure airflow to car engines. GM, Toyota and Peugeot are car OEMs already affected by this supply glitch but Ford, Nissan and Volkswagen may also be affected soon.  But global supply chain structures and production allocation worldwide means that US production may be unaffected for the most part. In addition, increased US production and exports may provide global demand relief.  The existence of other suppliers, such as Bosch and Siemens, may also permit some relief, if the part designs are fairly standard and modular.  Does this disaster and the associated supply glitches highlight the need to carefully monitor third and fourth tier supply capacity utilization and concentration int he industry ? Would part commonality and clear separation of hardware vs software controls permit greater supply chain flexibility to handle such disruptions ? How should the industry coordinate to ration supply across competing OEMs ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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