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The Supply ChainOne missing part stops the line

Front

How Things Get Made0127

The Supply Chain

One missing part stops the line

The chain of suppliers standing behind a single finished product.

III · The Machinery24 / 53

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0127 · The Primer24 / 53

A car has tens of thousands of parts, made by suppliers who have suppliers of their own. The company assembling it often does not know who sits three tiers down. That is why a fire at one small factory, or a shortage of one cheap chip, can halt production lines on the other side of the world for months.

  • Just-in-time delivery removes warehouses to save money. It also removes the buffer that used to absorb a shock, which is efficiency traded against slack.
  • The fix is unglamorous: map your suppliers, find the ones with no substitute, and hold stock of the cheap parts that would stop everything.
SourceSheffi, The Resilient Enterprise (2005)
Standard operations research

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