Disruptions rarely stay contained and aluminum is a clear example. In this Supply Chain Byte, Lisa Anderson explains how challenges in one material can ripple through the entire end-to-end supply chain, affecting the largest of manufacturers.

Novelis, a top supplier of aluminum sheets for the auto industry, had a fire in a key plant in New York. The fire severely damaged its hot mill, causing down-the-line impacts on their supply chain. Thus, a core customer, Ford, had to curtail production by 50% at its Dearborn facility. Stellantis also experienced issues and to a lesser extent, Toyota and GM were also affected. It is clear that companies need to prepare for these types of continued disruptions. When it rains, it pours. Not only was aluminum supply impacted, but it is also a key material designated for 50% tariffs, thereby limiting import options. 

What did Novelis and its customers do? Novelis reviewed its global network of plants to see if they could reallocate and increase capacity to better serve customers. This is an ideal example of where proactive companies use SIOP (Sales Inventory Operations Planning) as it quickly shows over/under capacity situations with what-if type capabilities. They also looked at partnering with their peers to supply materials to their customers. Strategic partnerships are becoming more and more important in today’s global supply chain. Additionally, their customers looked at shifting supplies between models to keep production going and customers satisfied.

What about the big picture? There is not enough aluminum capacity to meet customer demands. Tariffs have stimulated investments into aluminum capacity. Companies such as Emerites Global Aluminum,  Constellium, and Novelis are investing and expanding capacity. Aluminum is considered a critical capability for key industries such as auto, defense, and medical devices. Thus, forward-looking executives must review demand vs supply and ensure supply is aligned to meet the needs in their end-to-end supply chain.

Hear why leaders need to plan for disruptions and why they need to anticipate to ensure continued success. Click on our Supply Chain Byte here.

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Supply Chain Security & Resiliency