Building a Better, More Resilient Automotive Supply Chain
The automotive supply chain sector is experiencing unprecedented changes, disruptions, and adaptations. Whether it’s the COVID-19 pandemic or the growing digital transformation initiatives affecting the supply chain, the industry is evolving rapidly.
In one of our on-demand webinars, David Eyes, the VP/GM of automotive solutions at TrueCommerce, sat down to discuss automotive supply chain integrations, migrations, and evolution. Throughout his 25+ years of experience with the automotive supply chain, Eyes has encountered and helped automotive OEMs and suppliers overcome a multitude of challenges and obstacles. During the discussion, Eyes outlined the industry’s challenges over the last couple of years and how we can collectively move toward a brighter, smarter, and more resilient future.
Facing Today’s Automotive Supply Chain Challenges
“The automotive industry is at the culmination of considerable change,” Eyes says. “Much of this change is being driven by events over the last five years.” This is good news. Eyes explained how the industry’s desire to increase production volumes as fast and cheaply as possible inadvertently led to stagnancy.
Looking forward, Eyes sees the automotive supply chain shifting its focus to the following areas:
- Differentiation in design, infotainment, and safety
- Mileage increases and improvement to the electric vehicle (EV)-charging infrastructure
- Enforcing CO emission restrictions
- EV availability for the mass market
Overcoming these challenges and achieving these goals is easier said than done. It’s made harder by the lingering effects of complacency and the global supply chain disruptions that offered a wake-up call. The most prominent of these roadblocks are:
- Continued reliance on rigid, on-site, legacy technologies
- Processes that force employees to download, upload, identify, and manage data and orders manually
- Countless inefficiencies in the way automotive and OEM supply chains operate
That last point is worth dissecting further, as Eyes lists just a few of the ways inefficient processes and tools plague the automotive supply chain, including:
- A lack of real-time validations and notifications
- Manual processes that are prone to errors
- Limited integration of TierN suppliers
- Restricted cash flow due to outdated invoice processes
- Lack of access to reports, KPIs, and supply chain synchronizations
“We work in an industry where we are reactive, not proactive,” Eyes says. “Because we have so many of those manual processes that we know are susceptible to errors, we’re forced to use additional procedures to try and capture those errors, which goes against the very mantra of the automotive supply chain: getting it right the first time.”
Aligning the Supply Chain with Production Is Key to Automation Success
“One of the things that needs to change is the way we build and design our supply chains,” dictates Eyes.
For years, supply chain management has been seen as an afterthought, best left until production is complete. This is no longer the case. A lack of supply chain management throughout production can result in significant supplier failure and unplanned costs, affecting both suppliers and OEMs alike. The solution is dependent on the industry’s ability and willingness to prioritize the creation of the automotive supply chain alongside the design and creation of the vehicles themselves.
Start With a Roadmap
Thanks to the advancements the industry has experienced in cloud-based technology, we can now get both the production team and suppliers involved in digital supply chain processes. When a manufacturer begins production of a vehicle, suppliers are working on the supply chain processes to deliver the vehicle to consumers. Integrating these processes facilitates a seamless sharing of accurate data up and down the automotive supply chain, ensuring both parties are aligned.
When a company signs off on a car, they’re effectively signing off on the entire automotive supply chain process. Implementing this new “roadmap” between manufacturing and supply chain management helps to ensure that potential supply chain issues are identified and resolved.
“Why not use simple things, like label specifications, at the very start of the process, giving more suppliers the time they need to understand how to work with barcode technology?” Eyes asks. By moving toward a digital supply chain, automotive OEMs and manufacturers can do just that with every piece of technology and every step of the process.
The Power of a Digital Supply Chain
“If we don’t have robust digital processes at the top, we cannot create the resilient automotive supply chain we need,” Eyes says.
For continued success in the future, organizations need to inspect the various systems involved in the automotive supply chain process. Systems like warehouse management, finance production controls, sales, quality control, and inventory management are valuable tools, but they do not function at peak potential when operating in isolated silos. Simply put, all of these systems are more effective when integrated and automated.
Some benefits of utilizing an automated EDI system for your automotive supply chain include:
- Reduced errors from manual processes
- Increased visibility into inventory
- Faster materials procurement and time-to-market
- Cost savings from improved risk mitigation and ensured compliance
When an organization’s internal systems and departments are aligned from the beginning, the production and supply chain teams are empowered to take real-time data and use it to identify risks and issues in the automotive supply chain before impacting the supply chain. The industry’s future is all about integration and connectivity. The sooner your company embraces that, the stronger, more resilient your automotive supply chain processes will be.
If you want to hear more about aligning supply chain automation with product deployment and manufacturing, download the full webinar with David Eyes! In it, you’ll gain a deeper understanding of where the automotive supply chain is coming from, where it’s going, and how you can develop a versatile digital supply chain for your company.
About the Author: Ivy Davis is a Demand Generation Manager at TrueCommerce who has spent years delving into the challenges faced by manufacturers and retailers across industries. She focuses on providing supply chain insights and actionable advice through webinars, blogs and thought leadership interviews. She believes that empowering decision makers with knowledge drives them to make thoughtful decisions about supply chain technology and improve their overall business strategy. After a long day's work, Ivy enjoys cooking with her two kids and gardening outside.