Industry Insights: Transportationby
Supply Chain Redundancy
Although supply chain management is not a topic specific to the transportation sector, the automotive and aerospace industries have long been at the forefront of active supply chain management. Over time, the management of these supply chains has gradually changed.
In the beginning, companies like Ford Motor Company owned or controlled virtually 100 per cent of their supply chains. Did you know that Ford used to own its own forestry business, its own rubber plantation, steel foundries, and more? Over time, companies realized that there were efficiencies to be gained by spinning off non-core operations; in the case of Ford, this led over the years to the divestiture of virtually all of their non-automotive assembly operations – aircraft production, forestry, steel foundries, and even large part of their component manufacturing business (largely into Visteon).
A side effect of these divestitures is that new companies have sprung up to take on these niche areas of production. In many cases, these new companies further grew their niche to the point they have an extremely dominant position in the supply chain. Fundamentally, this is a great business for the supplier.