But auto companies are now entertaining a different view of that, says Ann Marie Uetz, a partner in the Foley & Lardner law firm who works with 100 or so auto suppliers.
Uetz said the firm's survey in June and July of 150 manufacturing executives, including some non-automotive businesses, found nearly two-thirds said they believe there will be a shift away from the just-in-time model. And many are planning to turn to greater use of warehousing — long viewed as a crutch for inefficient suppliers — to protect themselves from the disruptions still threatening to bring down supply chains and assembly plants.
According to Uetz, the emerging thinking is that a choice has to be made between continuing to operate as inexpensively as possible or taking new precautions to be more resilient — even if it means accepting added cost.
"Is resiliency in the supply chain most important, or is cost most important?" she asked. "How do you weigh those against each other?"
The trauma of the pandemic, she said, is forcing some supplier executives "to consider something besides cost."
Laurie Harbour is picking up on the same vibe in the North American supply base. But there is a more critical problem to deal with first.
Harbour, CEO of the suburban Detroit auto manufacturing consultancy Harbour Results, said in a presentation of her latest industry forecast last week that the top concern of automotive companies is survival.
"Many of them are very concerned about cancellation of programs. We've seen some bankruptcies," said Harbour, who works with Tier 2 and Tier 3 suppliers around the country.
"We've seen many of them pull down lines of credit to bring working capital in their business. They've restructured their corporate debt. They have cut payroll. They still have, in some cases, people furloughed," she added. "Most suppliers are working to stabilize their business."
But once the industry base has stabilized, she said, based on her conversations with executives, a new operating attitude is going to emerge.
"They will build contingency plans to weather future challenges," she predicted of suppliers. "They will work to better manage their supply base to ensure no further shutdowns in the supply chain. They will likely have backup suppliers for key parts, and potential double tooling for critical parts."