The global automotive industry is one of the most highly rivaled industries having a complex supply chain system. Any fluctuations in the global economy can impact the manufacturing or sales of any global automobile manufacturer. To bypass such fluctuations, manufacturers are relying heavily on maintaining intelligent automotive supply chain solutions to ensure all value chains are functioning optimally with lower bottlenecks and no cash blocks.
Automobile companies have to worry more than just the supply chain of their finished product to dealers and consumers. Procurement of raw materials and goods from global vendors also add up for a supply chain requirement that must be processed smoothly at all times. The rise in the number of automobile sales in the last two years have meant that automobile manufacturers need to be at their top game to make the best use of the bull market in terms of sales of newer units.
Rising sales and consistent growth are definite good news for the industry but also add pressure on automotive supply chain solutions to be ready for deliver ability at all times. Here are some of the key supply chain challenges and possible solutions adopted by various successful automotive enterprises.
Balancing stocks and over stocking
The good sale figures of the recent years have meant that automobile companies need to be well stocked for all their spares and core essential components at all times. Supply chain managers are often fighting the battle between being well stocked and being over stocked.
The challenge for automotive supply chain solutions becomes even more complex when procurement involves international vendors all relating to their home country market dynamics and economic situations. Relying on ordering components from vendors in one region can be a challenge if any economic scenario forces price escalations.
Bypassing such supply chain challenges are being done as automobile companies seek to embrace an agile supply chain networks making use of predictive analytics to understand the pulse of various market dynamics and allocation vendor orders accordingly.
Not ignoring product recalls
Irrespective of the market and the automobile manufacturer involved, product recalls are a very real possibility. In the US market alone over 6 Lakhs cars have been recalled for various reasons as on March 2017.
While a product recall adds to the brand value of an automobile manufacturer as it highlights their commitment to the consumers, it also adds unwanted pressure on supply chain lines. So, if an automobile manufacturer with already sluggish supply chains has to face the brunt of product recalls, the end result could lead to bottlenecks and cost escalations.
Automotive supply chain solutions that are always ready with plans to cater for such product recalls in various markets are the ones that are able to manage such an eventuality more swiftly. Linear supply chain in product recall adds too much pressure and is a definite recipe for disaster. Having agile supply chain networks is helping automobile manufacturers to cater to the product recall challenges without overspending money.
Analytics- The core essence of modern automotive supply chain solutions
Mary Barra, the CEO of General Motors during his presentation at the Automotive Logistics Global Conference famously said that auto industry will be changing more in the next five years than it has in the last 50. The change it seems has already started with Smart and autonomous vehicles being tested and considered to be a thing for the near future.
What this means for automotive supply chain solutions is that apart from spares, engines, mechanical parts, supply chains would also be responsible for software and technological solutions. In such a scenario only those enterprises that make use of the predictive analytics offered by various agile supply chains can sustain and manage the needs versus inventory dilemma aptly.
Proactive supply chain solutions or understanding future trends is a bare essential. The sooner an enterprise is able to analyze the future trends and needs, the lower will be the pressure of its supply chain and lower cost eventually.
Automotive supply chain solutions need to be constantly monitored and upgraded to ensure automobile manufactures stay ahead of their game. The deliver ability against rivals and peers and lower bottlenecks and reduced cost all have their core in smarter automotive supply chains.
Samantha, as a research and development blogger has more than 5 years of experience in writing blog posts that gives great insights to readers about the current trends in automotive supply chain solutions sector. She tries to make the world just a bit more pleasant enough by working on strategies that would help them prevent and create more awareness on automotive supply chain solutions. Connect to know more.