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I've spoken to suppliers who had 9 month payment terms to automotive (and other transport, train manufacturers are just as bad) customers. The law change in the

I've spoken to suppliers who had 9 month payment terms to automotive (and other transport, train manufacturers are just as bad) customers. The law change in the EU was triggered by exactly such excessive contract terms. They're still common in other areas where regulators have not yet stepped in. I know the area where the factory in TFA is based, and I can tell you they don't have nearly enough parking space for deliveries, which is one reason they insist on tight delivery windows. I happen to know truck drivers and they hate this arrangement as in practice this means they have to plan to get there way earlier and then either park on the side of the road or circle around. All nearby truck parking facilities are perennially full. These factories have a habit of externalizing this kind of additional costs to suppliers and simultaneously squeezing them for price, not to mention causing broader damage to society by clogging the roads and parking facilities, but that's beside the point. And yes, I happen to have hands on experience with procurement and sourcing. I've been redesigning customer projects around missing parts all year. Every industry is affected, but it's automotive which started it, and caused suppliers so much damage. This is what suppliers tell me and I have no reason to distrust them. My axe to grind is that I'm now dealing with the fallout.

hef19898 5y ago
Did automotive start it, or was automotive just hit first? I don't know, and I think might take a while until we know. I have to agree that 9 months payment terms are unacceptable. That truck yards at warehouses and factories are full has more to do with bad yard management, or non at all. That is less a problem with JIT or procurement, instead it is a purely operational issue. That us in SCM and logistics, incl. procurement, have tendency to push issues down to lower tiers is true. it is also true that logistics and transportation is offloading a lot on public infrastructure. Does it have to be that way? On the one hand, yes. Roads are public, railway lines more often that not as well (to an extent that is). That's what taxes are there for, because indirectly everyone if profiting from a running economy. Again, that is less the case in developing countries and should change. I also agree, and that is maybe even more important when it come to the environment at large, SCM should prioritize environmental and climate protection more, along with social standards. That won't happen so until it is financially beneficial to do so. This is a general issue with capitalism running rampant so. Chemical plants giving a shit about worker health and safety or the environment is as old as chemical manufacturing., just as an example.

hef19898 5y ago

Did automotive start it, or was automotive just hit first? I don't know, and I think might take a while until we know. I have to agree that 9 months payment terms are unacceptable. That truck yards at warehouses and factories are full has more to do with bad yard management, or non at all. That is less a problem with JIT or procurement, instead it is a purely operational issue. That us in SCM and logistics, incl. procurement, have tendency to push issues down to lower tiers is true. it is also true that logistics and transportation is offloading a lot on public infrastructure. Does it have to be that way? On the one hand, yes. Roads are public, railway lines more often that not as well (to an extent that is). That's what taxes are there for, because indirectly everyone if profiting from a running economy. Again, that is less the case in developing countries and should change. I also agree, and that is maybe even more important when it come to the environment at large, SCM should prioritize environmental and climate protection more, along with social standards. That won't happen so until it is financially beneficial to do so. This is a general issue with capitalism running rampant so. Chemical plants giving a shit about worker health and safety or the environment is as old as chemical manufacturing., just as an example.