Engaging a supply chain consultancy with automotive industry expertise is recommended when companies in this sector recognize a need to streamline processes in their supply chains. Automotive supply chains are complex as they have many tiers and lots of links in the chain. Although it is widely accepted that the automotive industry is a leader in running its supply chains well it is also clear that there’s room for improvement. Deliveries can be late, products could be of poor quality, damaged or incorrect and warehousing and logistics can be bottlenecks.
Using technology
Global vehicle manufacturers are known to use more ERP and packaged software systems than some other industries and they have adopted and integrated more e-business tools. The best direct suppliers to the vehicle manufacturers (Tier 1 suppliers) also utilize similar technology focusing on supplier integration and the sharing of data up and down the supply chain. However, this level of sophistication is costly and benefits can only be realized if systems are implemented and used efficiently. This is where automotive supply chain consultants can play their part.
Supply chain challenges
Automotive industries are caught in the wave of globalization. The challenge is to maintain and enhance supply chain flexibility and customer responsiveness whilst chasing economies of scale and cost savings. Such significant changes in the entire supply chain require tight focus. The automotive industry supply chain works on a -push’ model as opposed to a -pull’ supply chain. It is a mass production industry pushing cars out to be sold but the system is driven by the rate at which dealers order new vehicles. The consumer’s need for choice is changing the landscape and manufacturers must become more responsive to customer’s needs or lose income.
Opportunities for improvement
An external intervention can highlight areas of potential cost savings and efficiencies in the automotive industry supply chain.
Collaborating on product design with suppliers and outsourced designers to create continuous improvement can provide cost savings.
Operational costs can be reduced through leveraging an ERP system that gives full visibility into transactions across the entire enterprise
Taking advantage of e-procurement solutions and electronic data interchange (EDI) will streamline financial and business transactions.
Integrating with your automotive supply chain partners using reliable, real-time information can improve performance and flexibility.
Successful decisions are supported by analysis and reliable and relevant information that leaves no room for misunderstanding.
Quality data and its accuracy and accessibility are enablers.
Companies in the automotive industry want to improve the quality of their products, lower their costs and speed up the time to market. Meeting the challenges of today’s vehicle marketplace can be accelerated by using a supply chain consultantcy for the automotive industry.
