Aston Martin recall: what now for its supply chains?

Antony Bourne, global industry director, IFS

“It will be interesting to see how Aston Martin’s supply chain copes in the coming weeks, following news that they are to recall 18,000 cars after discovering a Chinese supplier has been using counterfeit parts for the past six years.

“There have been a number of high-profile manufacturer recalls in the automotive industry in recent years – Toyota called back over seven million vehicles in 2012 and Mazda 15,000 last year. While Aston Martin can’t match the scale of Toyota’s issues, it’s actually a problem that affects 75% of the cars they’ve manufactured since 2008, so is understandably very concerning for the company. It will put Aston Martin’s global supply chain under great pressure, and they’ll no doubt be keen to avoid significant disruption to day-to-day business.

“With automotive manufacturers, stock is manufactured as and when needed, resulting in small quantities of spare parts. This lean methodology could mean that the affected firms will struggle to quickly replace so many faulty airbags. Without spares on hand to replenish stock levels globally, the supply chain and internal distribution will be running at full capacity to assemble and deliver the new parts across the world.

“The success of such a recall depends on the company having immediate access to all necessary information, as well as meticulous planning and management at all levels globally. They will be relying heavily on traceability systems to notify owners of the fault and to actually get the cars in for repair. More staff will need to be brought in and Aston Martin will need to carefully coordinate the work of suppliers, distributors, warehouses and manufacturing workshops. Even once all the parts are manufactured, they will then need to ensure they’re stored locally, ready for customers bringing their cars in for repair.

“With the advancements in technologies like ERP applications to manage supply chains and quality control, there’s no room for excuses and claims that these incidents are inevitable. There is a wide range of analysis and quality control tools available to ensure proper procedures are adhered to, to avoid these costly recalls. However, the significant number of recalls in recent years suggests that these systems are not in place or are not operating at an optimal level.”

Richard Gane, supply chain director at Vendigital

“This is an embarrassing and costly recall for Aston Martin but they are not alone – a number of Western manufacturers have been adversely affected by sub-standard components sourced from China in recent years.

“Such events highlight the need for supply chain visibility and for manufacturers to work closely with Chinese suppliers on the ground to ensure quality standards are met. The recall might also be symptomatic of an underlying problem with Western buyer behaviour – there is too much focus on cutting cost and reducing margins and this is beginning to back fire. There may also be a lack of cultural understanding during sales negotiations.

“For example, during such discussions, the Western buyer will assume that quality is fixed while costs are being discussed, whereas his Chinese counterpart will assume that if the price needs to be changed, then the quality does too.”