German carmaker BMW AG is currently in a challenging situation. The company was forced to put production at its plants in China and South Africa on hold. The reason behind these difficult decisions has a logistics nature. The main supplier of the company, Robert Bosch, failed to deliver the necessary steering gears on time. This massive part shortage impaired production of several compact models.
The Problematic Part Shortage Concerns a Small Yet Indispensable Element of a Car
On Monday, BMW announced an unexpected lagging in its production efforts. Spokespersons stated that Robert Bosch has not the capacity for the time being to provision the carmaker with enough steering gears. This part shortage slowed down production for the BMW 1, 2, 3, and 4 Series.
This is why the BMW plants in Tiexi, China, and Rosslyn, South Africa are no longer working at their full power. For the moment, the German carmaker is trying to mitigate the situation with as many money saving strategies as possible. On the other hand, the company expects its main supplier to return with necessary orders and provide compensation for the damages it caused.
It Was an Italian Supplier that Caused the Misfortune
This unfortunate event revealed an eye-opening feature of today’s modern business models. Even though the consumerism is flourishing more than ever before, manufacturers are still highly dependent on their providers. One insignificant glitch in the supply chain can force business giants to go off tracks for a short while. This dependency situation caused BMW to lose valuable goods from the categories that are in high demand.
In its turn, Bosch declared that it was an Italian supplier that generated this type of discomfort. This party didn’t manage to stick to the deadline and deliver its casings for steering gears on time. Bosch chose to leave the name of this entity in anonymity. BMW stated that one part shortage in Europe could impact the Chinese market as well.
“Automotive value chains are international.”
At this moment, Bosch is working with its client on mitigating the aftermath of this misfortune. In case the part shortage continues for several days, the financial consequences will be high for both parties.
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