When I stopped working for Volkswagen in 2005, they had some 400,000 parts, or “numbers” as they are called in industry parlance, in their central warehouse in Kassel. With each car, the number climbed higher. On the other hand, some 5 percent were usually out of stock. The launch of each car caused raw nerves in the parts department. When a part was faulty, dealers and production manager were at war for parts. The production managers usually won, and blamed the dealers for shoddy service.
It’s tough enough to keep the hungry beasts at assembly lines and in workshops supplied with parts during peacetime. If a volcano over Iceland blows ash, or if a huge tsunami wipes out a good deal of Japan, it turns into parts paranoia. Now, Japan’s formerly powerful METI, the Ministry of Economy, Trade and Industry, is using the Tohoku disaster to force the Japanese car industry to standardize a lot of the parts it uses.
“Under the lead of the Ministry of Economy, Trade and Industry, manufacturers of automobiles, parts and materials will look into ways to share more components across the various vehicles produced by the automakers,” reports The Nikkei [sub].
One area is chips. Shortages of microcontrollers turned into a big problem after the tsunami. METI is now considering setting up a committee to discuss the standardization of microcontrollers and other semiconductor-related parts.
This is good news and bad news for the auto industry. The good news is that if a disaster strikes, that chip, battery terminal, brake pad, or cylinder head bolt can be bought from another manufacturer. Larger runs of commodity parts would lower their cost and shorten development times.
The bad news is that it could kill a golden goose. Selling replacement parts at huge mark-ups provides major income for automakers and dealers. Large automakers have it down to a science how to make a part slightly different, just to frustrate the efforts of those who deal in replacement parts. A standardized parts bin eventually will be a bonanza for the Boschs, AutoZones or Pep Boys of this world. It would also lower the barrier of entry for new competition.
Therefore, says The Nikkei, “some in the auto industry worry that using more common parts will shift the focus in the autoparts market too much in the direction of price, exposing Japanese autoparts makers to intense competition from low-cost producers in China and elsewhere.”