GM Putting Pressure on Suppliers
Reuters reports that, although GM cut the number of parts suppliers by 14%, it is continuing to increase the pressure on suppliers even though three of its main suppliers filed for bankruptcy last year.
With the possibility of a Delphi strike hanging over GM's head like the sword of Damocles(extra points for putting a metaphor, simile and Greek mythological reference in the same prepositional phrase), at some point it becomes self-defeating to demand price cuts from suppliers. As Reuters reports, GM is looking to Asia and other low cost regions for low-cost parts.
Once upon a time, the mantra was "just in time" inventory. Just in time inventory management is a dangerous game to play when your parts supplier is half a world away. As most of us UAW-LSP lawyers can attest, the shift in furniture manufacturing to China has resulted in huge delays in delivery to customers. Delivery times can be missed by months. A back up in a port here, a shipping strike there, lots of things can happen to delay a part and therefore ruin an assembly line's balance.
Reuters Business Channel | Reuters.com
Tuesday, January 10, 2006
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