On March 3, Dana Corp., a key supplier of axles, brakes and truck frames to Detroit auto makers, filed for Chapter 11 bankruptcy. In doing so, Dana became the 4th major auto parts supplier to file for bankruptcy in the past 14 months (Tower Automotive, Collins & Aikman and Delphi – of recent Shingo Prize fame).
The Virginia-Pilot published this article citing the regular loss of market share, high labor cost and overcapacity woes of Detroit automakers as the main culprits. Then comes the quote from C. Scott Pryor, a law professor who specializes in bankruptcies:
“Part of it goes back to the automobile manufacturers insisting on this ‘just-in-time’ manufacturing and shifting a lot of their costs on suppliers”
Why does Just-in-Time take the blame? I hate to see a good, proven, useful tool be blamed without any recognition at all of poor implementation and bad leadership. Like any other lean tool, JIT is not meant to be used as a stand alone process; and it is not meant to push problems elsewhere up or down the supply chain. It’s a tool that if applied correctly with the right supplier partnerships, can help expose process issues and waste that need to be driven out of the system.
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