Stepping It Up

When the coronavirus impacted the supply of Highlander running boards to TLS, multiple TMNA teams joined forces on a solution

March 10, 2020
Back to Work -- The Chinese parts supplier that makes the step plates for the Highlander's running boards -- forced to shut down due to the coronavirus -- is now back up to speed.

Extraordinary circumstances call for an extraordinary response.
 
And that’s exactly what TMNA’s parts professionals delivered when the trickle-down effects of the coronavirus threatened to disrupt deliveries of the 2020 Highlander.
 
This story of rising to the occasion began in mid-February, when Parts Supply Chain Planning (PSCP) rang the alarm bell: If no one took action, the Vehicle Distribution Center (VDC) in Indiana, would — by the end of the month — run out of the running boards it installs on select Highlanders. If that happened, those units would need to be parked in a Toyota Logistics Services (TLS) lot, significantly disrupting an incredibly complex dance among multiple players including, most importantly, Toyota’s dealers and customers.
 
A Part Within a Part -- The Highlander's running boards aren't made in China. But the non-slip step plates are.
 

The root cause of the shortage wasn’t the main running board assembly, produced by U.S. supplier Tiercon. The problem was the non-slip step plates that fit into the running boards. Those are made by a supplier based near Wuhan, the epicenter of the coronavirus (also known as COVID-19). In January, workers there were away for the Chinese New Year holiday. But because of the virus and the related quarantine, they weren’t allowed to begin returning to their plant until Feb. 17. It took another week or so for the supplier to regain full strength.

 
Meanwhile the VDC in Indiana, which installs about 22 running boards per day along with other accessories designed by Service Parts and Accessory Development (SPAD), was steadily depleting its supply.
 
“We were crunching the numbers every day,” says Kayleen Platt, a senior analyst in Accessory Supply New Model Launch Planning. “On Feb. 18, we forecast that we’d run out of inventory on Feb. 26. That’s when we contacted Tiercon and quickly came up with a plan.”
 
A Key Player -- Michigan-based Tiercon makes the finished running boards. It played a lead role in helping to fill the production gap caused by the coronavirus.
  

Extra Special Delivery

Normally, it takes four weeks for the step plates to make the journey from China to Canada, where they’re loaded on a train bound for Tiercon in Michigan. That doesn’t include the time it takes to transport the completed running boards to Indiana. So, to address the shortfall, all of the players rallied around an expedited schedule:
 
  • PSCP, working in coordination with Tiercon, arranged to have 96 step plates air shipped from China directly to Michigan for delivery on Sunday, Feb. 23.
  • Tiercon, in turn, organized a special work crew to come in on that Sunday to produce the finished running boards.
  • TLS Princeton and the Parts Supply Chain Operations (PSCO) team at North American Parts Center Kentucky took it from there, scheduling a special pick-up the next morning at Tiercon and same-day delivery at the VDC.
  • One day later, the VDC resumed installation of the running boards and the Highlanders continued to roll as originally planned.
“This filled the gap,” says Platt. “Hopefully the supplier in China will continue to operate as normal. But of course, in this situation, circumstances are always subject to change. So, we’ll continue to keep a close eye on it — as well as the many other parts that could be impacted by the virus.”

“It’s at times like this that we remember that we work with such great people who really are focused on our customers. Everyone took care of their link in the chain and we all came together to create a solution.”
 
By Dan Miller
 

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