In the 1950s General Motors ruled the world’s automobile manufacturing industry. GM was profitable and a prime target for union strikes. Nevertheless, GM wasn’t too concerned about labor strikes because it had acres and acres of engine blocks, transmissions, quarter panels and wheels stored behind its factories. If the union went out on strike, GM would hire scabs and keep on building cars with the mountainous, backyard inventory.
More importantly, GM’s mountain of parts allowed GM to keep working in the event that one of its suppliers suffered a production stoppage due to labor strikes, natural disaster or corporate bankruptcy. Thus, GM’s huge parts inventory provided GM with a “margin for error” in case anything unexpected happened.