Driving forward: Supply Chain for Automotive

Already grappling with AI and automation, trade wars, and declining car sales, the COVID-19 outbreak in 2020 has decimated the Automotive market. The Corona virus situation has shook the supply chain process and manufacturing operations all over the world.The need of the hour is a change in the current approach in supply chain and production.

Analysing the pain points for the industry seems to be a good starting point to get out of this cobweb.

A lot of people believe the automotive industry is a straight line, making the same products all day, everyday.But just think of all the things with in your automobile:the steering wheels, seats, colors, tail lights. Maintaining a level of consistency and error-proofing, to ensure that the right part gets to the right location just in time, every single time, is a challenge for any automotive supplier. There is more to the cycle than it meets the eye, and focusing on the improvement of quality will solve the problem of rising unemployment.

Another area of concern for supply chain management is the availability of skilled labor. With the average age of those employed in the automotive supply industry worldwide at around 50 years old, at a time when new technologies and new processes are driving manufacturing and product development, keeping skills current and attracting new talent into the sector is a challenge.This is one major obstacle to be overcome.Expecting an Engineer who has been only working on gasoline and diesel engines since the age of dawn, to switch to hybrid vehicle structure isn't realistic.The companies should find ways to train and develop the competence of employees from the very basic level.

Automotive is one of the markets where no company is standalone.Strategic partnerships are of key significance, particularly in specialist areas such as vehicle connectivity where the technology evolves so rapidly. OEM's direct their supply chain through value sourcing programmes that focus on key performance indicators like quality, logistics, technology and costs.

So despite it‘s strategic, commercial and logistical importance, the supply chain is under pressure.“A number of cost-cutting programmes have been initiated recently by OEM's(original equipment manufacturers) and as a result, the supply chain is under constant cost pressure,” says Paul Schockmel.

"Now is the time to make changes to adapt for the future."