LONDON – Japanese and global automotive production is being hit by the lack of an airflow sensor, according market research firm IHS Automotive. Global automobile production is likely to see a further marked drop in vehicle production – beyond that due to missing Japanese production – within a matter of weeks, the analyst said.
One estimate puts global vehicle output slumping 30 per cent within six weeks. And this is just one example of the difficulties being faced by automakers as a result of the earthquake and tsunami that hit Japan on March 11.
The supply of airflow sensors has come under pressure after a Hitachi Automotive plant in Sawa, Ibaraki prefecture, was damaged by the earthquake and subsequent tsunami. IHS Automotive estimates that Hitachi makes about 60 percent of the airflow sensors used by all leading car makers including Ford, General Motors, Renault-Nissan, Toyota and Volkswagen.
Meanwhile automakers in Japan are finding it difficult to restart vehicle production due to the lack of resumption of more general component supplies, and rolling electricity black outs affecting their plants. Some auto plants that restarted quickly after the earthquake hit have now started to scale back production, the market research firm said. All the major Japanese makers, including Suzuki, Mitsubishi, Toyota and Isuzu, are affected.
IHS Automotive said the supply shortage, already affecting global automakers, would begin to be felt even more intensely by the middle of April. Many automakers have already started adjusting production because of delays in supplies of components manufactured in Japan.
Supplies of plastics, rubber, and electronics components are reported to be falling short and General Motors (GM) and PSA Peugeot-Citroën have either announced production cuts or are in the process of reducing production in the US and Europe, IHS Automotive said.
GM has already halted production of small pick-up trucks at a plant in Shreveport, Louisiana (US) as a result of the lack of airflow sensors, according to IHS. In addition, GM has stopped some production at its facilities in Eisenach (Germany) and Zaragoza (Spain), IHS added. PSA Group is also considering reducing production at most of its European facilities owing to the shortage of sensors, which is expected to affect production of the Peugeot 207, Citroën C3, and other models. PSA is considering cutting production at its plants in Madrid and Vigo (Spain), Poissy and Aulnay (France), and Trnava (Slovakia) by between 40 and 50 percent, while production at plants in Sochaux, Sevelnord, and Mulhouse is being cut by up to 75 percent, according to IHS Automotive.
Yes, Just in Time has it's problems because it typically does not allow for catastrophes. Of course, second sourcing is pretty common but requires time to get parts in-house and, when an event such as those occur, second sources will often not have enough product available to meet the requirements.
The industry standard "Just in Time" supply chain does not work with major disruptions like the one in Japan. I am surprised by the lack of 2nd sourcing of the air sensors and wondering why auto manufacturers did not insist on physically separate and possibly completely independent second sources for all key components. This is a basic failure of risk management 101. One may argue that "who would have expected this?" but that is not a valid argument; earthquakes in Japan (and elsewhere) are not unusual nor unexpected. Yes the magnitude was significant but then again not a 1 in a million type of occurrence. We should learn from this experience and develop contingency plans for any major production area or specialized part supplier.
Hitachi airflow sensors from japan is now in short suppy or not available so the vehicle manufactures globaly sorting to reduced production or halt the production. Now japanese manufactures needs to think and start their ancilary units in other countries for those products whih are marketed globally.
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