DETROIT -- About 70 of General Motors' suppliers were jarred by an April earthquake in Japan. All but one were able to scramble to keep parts flowing.
GM hasn't identified that outlier, a small maker of parts used in infotainment systems for everything from the Chevrolet Cruze to heavy-duty GMC Sierras. But the fallout was hard to hide: Four of GM's North American plants went down for two weeks starting in late April, hamstringing several key vehicle launches and contributing to a punishing performance in May that snapped GM's 12-month streak of retail sales growth.
The incident shows how sensitive global automakers remain to the tiniest disruption in their supply chains, even after redoubling their efforts to insulate themselves from natural disaster in the wake of the devastating 2011 Japan earthquake and tsunami that crippled several Asian automakers.
In GM's case, the fallout could have been far worse. The company quickly redirected the crimped supply of infotainment parts to its pickup and SUV plants to prevent lost production of its biggest moneymakers, according to two people familiar with the matter. A GM spokesman declined to comment on the move.
The downtime at the four plants will leave GM scrambling to make up full-year production for several models, especially the Cruze, whose inventory as of June 1 was 39 days, nearly a three-year low, according to the Automotive News Data Center. Still, GM believes its swift response to the supply disruption shows how much more nimbly it's able to shuffle parts among vehicles, plants, countries and continents to keep its most important assembly lines humming.
"The dramatic lessons learned from the tsunami enabled us to minimize the impact" of the April quake, GM CEO Mary Barra told reporters last month.
Barra said about 70 of GM's Tier 1 and Tier 2 suppliers had their operations disrupted by the April quake. The supplier that caused GM's shortage "has some financial difficulties and was in the process of consolidating facilities," Barra said, without naming the company or elaborating on the problems. The incident has prompted GM to change its policy to require suppliers to notify the company if their ability to deliver parts changes.
"We have changed our process to even require communication after sourcing," Barra said.
Within hours of the earthquake, GM had a war room set up at its headquarters in Detroit. Each wall was covered in charts and diagrams to show the parts, vehicles and plants affected; calendars showing how far out each vehicle line would be affected; and different scenarios showing the effects on the bottom line and which parts could be rerouted.
"Within 24 hours, the team had an assessment of who was impacted and what would be the potential ramifications down the line," said GM spokesman Nick Richards. "After the tsunami, we didn't know what we didn't know. Our supply chain organization didn't know who in each region they needed to work with."
Now, GM supply chain officials convene a conference call each Wednesday at 5:30 a.m. in Detroit to discuss potential supply bottlenecks and how to mitigate them, whether from a natural disaster or a snag at a far-upstream Tier 3 supplier, Richards said. About 20 people join the call from Germany, Poland, India, China and Brazil and elsewhere.
Wherever a problem pops up, a rep from that region briefs the group on the affected component.
Automakers have deeper visibility into their Tier 2 and Tier 3 suppliers compared with five years ago, says Mike Jackson, senior manager of North America vehicle production forecasting for IHS Automotive.
"In prior natural disasters, manufacturers realized that they really didn't have information beyond the Tier 1 suppliers of where their vulnerabilities were," he said.
Today, automakers can more quickly determine which parts are affected and reroute them so that they're allocated to the most important vehicles, helping to limit the financial hit.
Jackson says, "There's still opportunity to learn and get even better from every incident."