Sad news hit the headlines last month as Volkswagen announced that the iconic Volkswagen T2 (or the hippie bus as it is more fondly known) will soon go out of production. The revelation follows a number of new safety laws which require every new vehicle manufactured in Brazil to be fitted with air bags and anti-lock brakes.
Over its 63 years of production, the hippie van has been modified to take on a diverse range of uses. Whether it was used by rock bands to tour across Europe or haul surfers up Americas west coast, for owners and enthusiasts alike, the VW minibus will remain an automotive hero. Despite its versatility however, even the legendary hippie van is not immune from changes in legislation and regulation.
On the 31st of December this year, production of the hippie van will cease as the new laws come into force in 2014. Given that the factory located on the outskirts of Sao Paulo is the only remaining facility to still produce the classic bus, when the final bus rolls off the production line, it will be the last of an elite breed.
While the impact of these particular changes in safety regulations are limited to just a small number of vehicles manufactured in Brazil, legal obstacles can impact businesses on a much broader scale.
Take for instance the trade agreement which is currently in the final stages of negotiation between Canada and the European Union: with the promise of reduced tariffs and streamlined trade regulations, the changes will have a profound impact across virtually every sector.
For example, the relaxed trade legislations are predicted to hold some considerable benefits for the food industry. As highlighted by the industry association for Canadian beef, an additional 65,000 tons of beef products could be exported to European Union member nations. In addition, European dairy producers are expected to supply Canadian consumers with an additional 18,000 tons of cheese.
In total across all industries, the agreement is estimated to increase the value of trade between the EU and Canada by a staggering €26 billion. While there is some skepticism as to how long these benefits will take to materialize, this trade agreement presents a huge opportunity for both Canadian and European businesses to increase distribution and pursue entirely new markets.
At the other end of the scale however, a sudden switch in international regulations could just as easily leave operations subject to crippling trade restrictions. Take for instance China’s trade legislation which controls the export of rare earths: given that these minerals are used in almost every conceivable electronic product, when the quotas were first enforced in 2010, many businesses faced costly bottle necks as they struggled to cope with the limited supply. In order to satisfy their rare earth requirements, businesses such as Toyota and General Electric had little choice but to invest millions in developing entire new sources of this crucial mineral.
As highlighted by China’s volatile rare earth trade regulations, failure to respond quickly to new legislation can lead to major disruption. As a result, organizations with global interests must ensure that their supply chains are flexible enough to cope with change.
Through adopting technologies which provide an overview of operations, businesses will be able to gain a bird’s eye view over the entire supply chain. Utilizing such tools will in turn enable organizations to make more informed supply chain decisions and thus be better positioned to manage the impact of legislation.
Although the changes in Brazil may have contributed to the sad departure of the VW T2 from our roads, the mini bus will always be fondly remembered. Furthermore, considering its build quality and rugged simplicity, the legacy of the hippie van will no doubt live on for years to come.
Given that legislation is an unavoidable reality for every business, how have changes in legislation impacted your supply chain and what tactics are you adopting to safeguard your operations from legislative disruptions?
