DID YOU KNOW:
...That there’s a whole new way of thinking in regards to companies dealing with outrageous real estate prices? Toyota has hatched a very clever plan that we’re bound to see copied a lot in the near future. Due to high prices for land in the Silicon Valley in Northern California, Price Simms Toyota has decided to build housing units above its dealership: Fancy condos designed to make residents completely unaware that they live above an automotive dealership. This strikes us as a very clever idea that was big in the 1930 and 40’s. Living above a store, bar or restaurant was considered pretty common back in the day, and we think it’s about to make a comeback. (Via Automotive News 3/29/21)
...That we might see new car dealers run out of inventory this summer? That’s right, new car manufacturers are running out if critical parts. Twenty seven manufacturing plants now sit idle worldwide and the count grows every day. Jobs are being lost because plants don’t have the all the parts they need to finish their vehicles. Two operating methods got us to this point, both seemingly a good idea at the time. First is “Just in time delivery,“ an operating system where parts are delivered to the plants just hours before they were needed. Loaded train boxcars pull into the plant and parts are removed by highly skilled forklift drivers and are taken to the area were they are to be installed. This method lowered costs to the manufacturer because they weren’t buying parts that were being stored and saved storage space in the plants. This method became a problem when it was realized the manufacturer had no “savings” account for parts and no inventory to fall back on — none.
The even more painful lesson was that “single sourcing” parts allowed the manufacturer to put a lot of pressure on the supplier for price reductions, but now it’s left the same buyers empty handed for a number of parts, any of which are critical when you don’t have them. Purchasing is far and away the meanest, nastiest and most demanding department in any manufacturing company. This policy has bitten the manufacturers hard, some of whom really deserve it. Moving forward, (for those who survive this mess) you can look for a sweeping change to this approach. Oh, they’ll still be nasty, mean and demanding when it comes to price, but more jobs will open up as the need for second and third supplies on components opens up.
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