'Nylon 12' shortage? Watch logistics wizards work

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Today in Detroit, rival suppliers and automakers are huddling in emergency session because of a March 31 explosion and fire at an Evonik chemical plant in Marl, Germany.

It's a chance for the industry's unheralded miracle workers -- the logistics experts -- to do their jobs.

The explosion killed two workers. It halted manufacturing of the resin CDT, a primary ingredient of nylon 12 used to make automotive fuel and brake lines. That’s certain.

Today’s meeting is about the uncertainties: How long to restore CDT production in Marl? How much nylon 12 is available? Who else makes it? How bad is the shortage? Which auto assembly plants will have to close for lack of parts? Can we substitute? Should we?

Preliminary information is sketchy, and grim.

Marl can’t reopen until “the end of summer” at best. Very few plants worldwide make CDT, they’re pretty much at maximum capacity, and there’s a global shortage because of new uses in other industries. Evonik will open a new Asian CDT plant -- in 2014.

Analyst Tim Urguhart of IHS Automotive estimates Evonik and another European chemical company have half the world CDT capacity.

Supplier TI Automotive Chairman William Kozyra has alerted automotive customers of a “real and immediate” shortage and warned that “the possibility of production interruptions at [some plants] is high.”

There are apparently some automotive tubing substitutes for nylon 12, including nylon 6, nylon 10 and nylon 10/10. But testing and validating parts made with other compounds could take months.

And automakers simply don’t substitute parts lightly, especially primary safety systems. No executive says “This component must function under high pressure, intense vibration and temperature extremes for decades without a single failure causing fiery death, but if you say this substitute is just as good that’s fine with me.”

It’s hard to compare a nylon 12 shortage to the massive disruption following the Japan earthquake and tsunami 13 months ago. It’s one chemical and one supplier rather than an entire industrial region. And the death toll, while real, is mercifully smaller.

But virtually every new vehicle needs brake and fuel lines.

Hence today’s emergency meeting. Suppliers and automakers will take stock of the situation. Then their supply chain miracle workers will go back to work.

I don’t use the term “miracle workers” lightly. These folks keep the assembly lines rolling. You say 10,000 individual parts in a car, from all over the world, sequenced and many delivered just-in-time. They say no problem.

It takes planning, monitoring, wheedling and the occasional emergency air charter, but today’s assembly lines rarely shut down for lack of a part.

And they keep learning. Many of today’s logistics pros cut their teeth back when air bags were newly mandatory and one of the few sodium azide propellant makers blew up a factory.

The latest lesson from last year’s Japan quake: double sourcing a Tier 1 part isn’t certainty if both T1 suppliers use the same T2 provider. New take-aways: If your T1s all use the same source, forget staying lean and build bigger safety stocks. And know where emergency replacements are.

So watch the nylon 12 crisis unfold. If few assembly lines worldwide close, it may be just the latest logistics lessons learned.

You can reach Jesse Snyder at jsnyder@crain.com.

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