Inadequate backup plans and limited supply chains have put the automotive industry in an especially tenuous position for surviving the ongoing coronavirus outbreak, according to two analysts studying the situation.
“What our clients are learning is that they’re not as prepared as they could or should be,” said Jeffrey Pratt, Supply Chain leader at BDO, in a phone interview. “What we’re learning is not only as a result of coronavirus but also some of the trade and tariff wars, having so much supply concentrated with suppliers in China and not being so geographically dispersed. That’s sort of been a longer term effort that started with the trade wars and it’s almost exacerbated by the coronavirus.”
For the auto industry, such preparedness can be especially challenging because of the nature of the business, including short lead times for incoming parts and components due to the long-standing strategy of just-in-time delivery to assembly plants in order to minimize stockpiling inventories.
Read the article at Forbes.
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