Failure in the Automotive Industry - The Principal Explanation

Failure in the Automotive Industry – The Principal Explanation

The US automotive industry suffered a fatal blow. But any individual who claims that the industry’s demise is usually linked to a single root-cause of failure is sadly mistaken. I spent a higher portion of 10 years inside that industry a lot of which is an executive or managerial role.

However, there is no silver bullet that triggered the fall. I say regrettably due to the fact a single lead to failure may be prevented inside the future. In this case, the blame may be placed only on the system as a whole producing it hard to guard against a repeat occurrence.

What the automotive industry suffered was a catastrophic failure brought on by several points of failure. We’re talking systemic failure in its truest form. As an insider within the industry, I can personally attest to several of the actions (or lack thereof) that pushed the industry to a collapse.

Among the biggest gremlins that undermined the industry was a myopic focus on piece price (expense). More than the years the automobile manufacturers became engulfed in driving (no pun intended) suppliers to decrease sell costs in an attempt to lessen the production expense of a car or truck and hence boost the bottom line.

This shortsighted concentrate on decrease piece price was so powerful that supplier relationships have been sacrificed. In truth, certainly one of the Massive 3 automotive companies believed that if a single supplier went beneath that an additional would always step up.

How is the fact that arrogant?

The stress for reduced piece cost was so intense that suppliers have been forced to seek low-cost nations for the procurement of parts and their very own manufacturing processes. Around the surface, this method may well appear logical. However, what was lacking was a holistic view in the …

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