Monday, July 23, 2012

Wrap-Up on the Nylon-12 Shortage

So the Great Nylon-12 Shortage of '12 (previously discussed here, here, here) appears to be fading.

While everybody was really concerned about the nylon-12 supply, to call it a nylon-12 shortage is to miss a important lesson. The Evonik plant that had the blow-up didn't make nylon-12, but instead my cyclododecatriene (CDT), a precursor to nylon-12. Evonik is a large supplier of nylon-12, but is even a larger supplier of CDT. That's why there was a problem - people thought that they didn't need to worry about nylon-12 suppliers since there were so many, but it really was the CDT supply that they needed to keep their eyes on (a point that the article linked to above fails to see - the table at the bottom of the page is about nylon-12 volume, not CDT volumes).

Think of a consumer product that you can buy from a number of different stores, such as a 2-liter bottle of Dr. Pepper. We all know that the product is coming from the same factory - that the different grocery stores all have the same supplier at some point back up the supply chain far enough, but that was not the case with nylon-12 and automotive suppliers. They didn't look up the supply chain far enough.

It certainly can be easy to blame the purchasers for this lack of insight, but at the same time, I imagine that it would be hard for Toyota or GM to really get much useful information about CDT. After all, it's not like car manufacturers or any of their suppliers are buying CDT. They could try questioning a nylon-12 supplier about their CDT suppliers, but that's not going too productive. The best way to avoid a repeat of this is to accomplish what Ford did - pre-identify alternatives to nylon-12 entirely. I can still imagine scenarios in which the supply lines for both a primary material and a secondary material could be taken down together, but that is pretty unlikely.

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