Thailand floods affect more automakers' supply chains
Supply chain news continues pouring in from Thailand, as the country’s northern region is experiencing the worst flooding in five decades.
A couple days after we reported that the Thailand flooding was affecting Honda’s supply chain, reports are flying in that other carmakers are also being impacted.
Honda, Toyota, Ford and Isuzu Motors have all been forced to shut down production plants due to the floods, which have killed at least 281 people. Honda was the hardest hit company initially, as the company closed a plant and evacuated workers at its Ayutthaya production plants, which produce about 240,000 vehicles each year.
According to the Wall Street Journal, Toyota has closed three facilities of its own that are responsible for producing over 500,000 cars annually.
Honda is considering sending parts from Japan to help give its Thailand plants a kick start once work is able to resume, but with floodwaters racing to capital Bangkok, disruption could continue throughout the nation.
While a shift in the automotive supply chain is certainly a possibility, Asian business consultant Sundi Aiyer said that he’s seen signs that automotive companies affected by the Thai floods are rapidly shifting suppliers and transferring inventory to safer locations.
Other car manufacturers with operations in Thailand, such as General Motors and Nissan, have been relatively unscathed by the flooding, but could take a similar stance to what Ford has done. In anticipation of supply chain disruption, Ford suspended production at its Thailand plants to better assess key component supplier impact from the flooding.
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Other companies in the heavily impacted Rojana Industrial Park include Nikon and Canon, the latter of which said that it wouldn’t be able to resume operations at its printer factory until Friday at the earliest.
With manufacturing plant disruptions and local rice harvests ruined, Thai government agencies predict that the disaster could temper economic growth expectations by a full percentage point. The National Economic and Social Development Board had forecasted a 3.5 to 4 percent growth for 2011.
Kuehne+Nagel cuts carbon footprint by 70% for Honda China
Around 16,000 tonnes of CO2 has been cut from supply chain of Honda's China-based manufacturing division through a road-to-rail transformation in partnership with logistics leader Kuehne+Nagel.
The programme was developed through KN Sincero, the joint venture between Swiss headquartered Kuehne+Nagel and Chinese automotive logistics firm Sincero, established in 2018.
KN Sincero worked with Honda China to develop an integrated solution to convert much of its domestic long-haul trucking to train lines, using regional hubs to improve supply chain performance and further reduce carbon emissions. The programme delivered consolidations as well as value-added services, including sorting, scanning, repackaging, GPS track and trace, and recyclable container management.
"Kuehne+Nagel has always been a supply chain partner that we can rely on, to help us improve our supply chain performance whilst also achieving our environmental goals,” said Mr. Jiang Hui and Mr. Takuji Kitamura, Joint General Manager of Wuhan Dong Hon, the logistics affiliate of Dongfong Honda Automotive.
After six months of shifting to the road-to-rail model, new supply chain reliability and efficiencies are expected too trip 16,000 tonnes of carbon emissions annually. The carbon savings represent an enormous 70% reduction in total.
"Automotive is one of the most important sectors in contract logistics, particularly in China, the world’s largest automotive market,” added Gianfranco Sgro, member of the Management Board of Kuehne + Nagel International AG, responsible for Contract Logistics. “I am glad that Kuehne+Nagel and Honda share a common vision of service, innovation and sustainability.”
Kuehne+Nagel’s Net Zero Carbon programme
Kuehne+Nagel announced its Net Zero Carbon programme in 2019 with a dual purpose to reduce CO2 output in its own logistics operations, as well as partnering with organisations to minimise their own impact on the planet. Kuehne+Nagel reached carbon neutrality globally in 2020 throughout its own, direct emissions, and is now focused on developing its capabilities to serve partners.
Dr. Detlef Trefzger, Chief Executive Officer of Kuehne+Nagel International AG, said the programme is “a package of measures to fight CO2 emissions and provide sustainable and innovative supply chain solutions – hand in hand with our suppliers and customers”.
As part of the initiative, Kuehne+Nagel established its own nature projects in Myanmar and New Zealand, and invested in ‘nature-based’ carbon dioxide compensation projects to strip harmful emissions from the environment. It is committed to being CO2 neutral for shipments in its network of transport suppliers by 2030.