Where are the weak links.
Do you know of cyclododecatriene or CDT? I have not heard of it either. But if you are associated with automotive supply chains, you will know of it by now.
CDT is a precursor ingredient for a resin called PA12 or Nylon12, which is a constituent of plastics used in the automotive industry. The manufacturers of this chemical would be Tier 3 or lower suppliers, so of little concern to the automotive assemblers. That is until the factory that supplies 50 per cent of CDT was shut down by an explosion. And how many other suppliers are there in the world? Two!!
An estimation is that less than two months global supply of CDT remains. Assemblers are contacting suppliers to find out who uses the ingredient, what components are affected, the situation with supply chains and if other sources exist. With global supply chains and just in time systems, all is well until something goes wrong; so should assemblers know where the risks are in their supply chains before a problem occurs?
This is not the first time an industry has been disrupted due to the lack of supply for a critical, but little known ingredient. The difference now is that with so little fat in supply chains, the effect on the plans of assemblers and branded products can be very quick.
In my book, A Framework for Supply Chains – Logistics Operations with an Asia Pacific Perspective, I discuss supply chain knowledge – the increasing need to know about each supply chain of a business, so that risks at each link can be identified and analysed. Knowledge of supply chains should be a major input when structuring and updating your organisation’s logistics strategy.