Loss to Society

The March 31st explosion at Evonik Industries in Marl, Germany is likely to have the same effect on worldwide automotive production as last year’s Tsunami and reactor accidents in Japan. The loss to society will be the sum of the costs of the damages at the plant that was destroyed, as well as the lost wages of workers who will NOT be building autos due to this accident, and the increased price paid by buyers who must pay the price demanded because they need to replace their car. Plus the cost of a gazillion PPAP’s and material trials for the substitution / replacement of Nylon 12, knowing the automotive industy’s love of and addiction to documentation. Instead of minimizing stock at each and every inventory in the supply chain discretely, perhaps it is time for the “businessmen” to do some supply chain contingency planning to assure that adequate stocks are distributed throughout the supply chain to mitigate the possibility of a single source failure.