Blog: Building a Better, More Resilient Automotive Supply Chain

January 19, 2021 Ivy Davis

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 a recent webinar, David Eyes, the director of Automotive Solutions at DiCentral, 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. He’s helped write global standards for MMOG/LE automotive guidelines, serves as a board member on multiple automotive manufacturer associations, and is uniquely qualified to track and predict where the automotive supply chain process is changing. During the discussion, Eyes outlined the industry’s challenges in the last year 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 because of events over the last five years. This is good news, as Eyes explains how the industry’s desire to increase production volumes as fast and as 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 Electronic Vehicle-charging infrastructure
  • Enforcing CO emission restrictions
  • EV for the mass market

Overcoming these challenges and achieving these goals is easier said than done, especially with the industry still working through the lingering effects from the years of complacence that Eyes identified. 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 strategies and printing manually.
  • Countless inefficiencies in the way the automotive and OEM supply chain operates.

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:

  • No real-time validations and notifications
  • Manual processes prone to errors
  • Limited integration TierN supplies
  • 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.”

For years, supply chain management has been seen as an afterthought best left until production is complete, but this is no longer the case. It’s resulting in significant supplier failure and unplanned costs that affect 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 engineers and suppliers involved in our electronic, digital supply chain processes. When an engineer begins manufacturing a vehicle, the supplier is working on the supply chain to deliver the vehicle to consumers. This 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, since this new “roadmap” of manufacturing and supply chain management ensures that all the potential supply chain issues have already been 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?” 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.

To succeed in the next year and beyond, organizations need to inspect the different systems involved in the automotive supply chain process (warehouse management, finance production controls, sales, quality systems, etc.) and integrate them, which don’t reach peak potential when operating in isolated silos. Simply put, all systems must be connected in the early design phase.

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 integrations and connectivity, and the sooner your company embraces it, 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.

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