Supply Chain Management During a Recall - KBC
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Real-world example

Supply Chain Management During a Recall

The widely used modular systems in the automotive industry offer cost advantages in both production and development, while also enabling technically and qualitatively mature products by reducing the number of variants. On the other hand, modular systems require a particularly high level of component validation, as conceptual and production-related errors affect an even larger product population. Potential recalls can then become a nightmare for companies.

Background

Our client, an automaker, launched a global recall involving various engine variants and a large number of affected vehicles due to a design flaw in a modular component. At that time, the majority of the recalled components were no longer in series production at the supplier’s facility. Meeting the volatile demand for replacement parts in a timely manner was complicated by a lack of production capacity, long logistics routes, and a complex variant structure. In addition, series production had to be maintained throughout the entire period.

Specific Task Description

Demand Management: Reliable forecasting of component demand by variant, location, and time.

Production Control: Demand-driven management of the entire supply chain, taking into account available capacity, the product mix, substitution flexibility, and delivery times.

KBC Approach

Demand Management:

  • Transparency regarding the at-risk population through the creation of a database of affected vehicles
  • Transparency regarding the components installed in the vehicles, including the production date
  • Information on the current location of all vehicles and their repair status
  • Forecasting customer behavior based on market-specific regulatory requirements and historical data

Production Control:

  • Transparency and tracking of subcontractors' capacities and the availability of subcomponents
  • Daily monitoring and control of production at the Tier 1 supplier.
  • Transparency regarding the production capacities of individual lines and facilities to identify bottleneck processes and opportunities for increasing capacity
  • Managing Delivery Routes to Overcome Supply Bottlenecks

Impact Achieved

A recall is a nerve-wracking experience for everyone involved, but especially for the customer. Therefore, a smooth process is crucial to minimizing the frustration of affected customers. Long wait times due to a lack of replacement parts not only result in high short-term costs (e.g., from providing temporary transportation), but also have a very negative long-term impact on the company’s image.

Portrait photo of Larissa Fahrmeier, Director at Kemény Boehme Consultants (KBC). A woman with shoulder-length, dark brown curly hair smiles broadly at the camera. She is wearing an elegant white chiffon blouse with black ruffles and a button placket over dark blue dress pants, as well as a delicate silver necklace and a silver wristwatch; both hands are confidently placed on her hips, and she has an energetic and open posture.
Portrait photo of Larissa Fahrmeier, Director at Kemény Boehme Consultants (KBC). A woman with shoulder-length, dark brown curly hair smiles broadly at the camera. She is wearing an elegant white chiffon blouse with black ruffles and a button placket over dark blue dress pants, as well as a delicate silver necklace and a silver wristwatch; both hands are confidently placed on her hips, and she has an energetic and open posture.
Larissa Fahrmeier
Director

Using KBC’s proven approach, we help ensure full transparency and a better understanding of the entire recall supply chain—from n-tier suppliers all the way to their customers’ vehicles. This helps align production with demand, thereby minimizing transportation, warehousing, and mobility costs.