Friday, December 10, 2004

Where is the bottleneck?

A reader with some first hand knowledge of the armor production process makes an excellent point in a previous thread on the shortage of vehicle armor:

The ability and capacity to assemble armored vehicles does NOT mean that the upstream suppliers also have the capacity to produce more Ceramic armor plating.

I agree- there probably is no shortage of assembly capacity of vehicles - whatever the configuration. But, I do believe there is a shortage of ceramic armor production capacity.

Ceradyne is opening a new plant - I understand there was over an 18 mo lead time to manufacture and deliver the furnaces needed for the production - and they are not sourced in the US.

The MSM will mislead by discussing the assembly of vehicles - but that is not where the bottleneck is... I had the opportunity to talk to some of the people at Ceradyne - from what was related during the visit, the bonus potential and contracts are set up to run capacity at 100% 24/7.

I just do not buy that if capacity existed along the entire supply chain - we would be artificially limiting production.

He agrees that there's a story here, but:

The real news story should be the loss of manufacturing capacity and our dependency on the rest of the world for our own internal critical equipment (furnaces to produce the final product, machine tools, etc).

In subsequent emails, he explains some details of the production process, and how the manufacture of the furnaces (an 18 month process) is the hold-up on production. This site has information on the armor, and I'm still looking for more info on the production process.