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The Future Automotive Supply Chain

The Future Automotive Supply Chain

“Smart Logistics” can provide real-time analysis of supply routes – such as potential bottlenecks – and allow automakers and suppliers to react immediately to changes in demand, inventories and manufacturing capacity.

The automotive industry is changing faster now than at any time in its history.

The technology making autonomous driving and connected cars possible also is changing the way cars are built, where their components are sourced and how the supply chains are managed.

A premium car today may have 50 computers and 100 million lines of code. That’s four times more code than an F-35 fighter jet.

Working closely with automakers and suppliers, and having witnessed firsthand the rise in prominence of strategic supply-chain management, we believe several key trends will emerge:

  • Data integration will make logistics a cohesive element of the manufacturing process, allowing more customization with no impact on lead times.
  • The need to accommodate more bespoke orders will intensify the need for responsiveness, which means logistics providers and suppliers must be able to accommodate very late changes.
  • A greater level of visibility will be required to enable customization without jeopardizing robustness of supply.

But what will cars be like? Will they still be as complex as today, requiring a complex supply chain, or will they be simpler electric vehicles with fewer components and less need for big supply chains? And how will data in the cloud and the Internet of Things be best utilized?

First, Industry 4.0 is becoming a commonly used phrase, and technological advances already are driving generic supply-chain changes across all manufacturing industries. The key opportunity that exists – and the direction in which the industry is headed – is the use of cloud data to link the supply chain, so the entire supply chain becomes a single, integrated global manufacturing operation, rather than discrete operations joined by logistics, enabling a lot more to happen in real-time. The emergence of “Smart Factories” is dependent on the implementation of “Smart Logistics,” which provides real-time analysis of supply routes – such as potential bottlenecks – and the ability to react immediately to changes in demand, inventories and manufacturing and logistics capacity.

Such trends point to the need for more premium freight, more expertise, more flexibility, more responsiveness, more contingency planning and more strategic use of built-in emergency logistics as a proactive safeguard of highly responsive, high-risk supply-chain operations.

That same operational alignment and tightening of supply-chain integration also will be felt during production launch and ramp-up. Our critical projects specialists already are helping vehicle manufacturers that have needed to push back tooling delivery due to late changes.

With more and more engineering validation now committed to computers, we have to help our customers compress their timescales in new ways so changes can be made later than they thought possible, without any impact on production schedules.

The industry already is experiencing heightened time compression, with more new models launched more frequently in a shorter timeframe than ever before, with some automakers offering near-bespoke levels of trim interchangeability on best-selling models.

Social media and emerging digital retail systems now promote pre-selling of vehicles even before cars have reached showrooms, so vehicle buyers have a promise of a delivery date that cannot be missed before showrooms are prepared, sales staff trained and sales targets set.

A vital enabler and the technological safety net of a data-immersed future supply chain will be software such as Block Chain, which reduces risk by providing a safer virtual working environment for automakers, suppliers and logistics providers while offering real-time updates of every step of the process.

Fundamentally, the supply chain always will rely on components leaving one location and arriving at another – we just have to ensure this process is as swift and foolproof as possible.

Brad Brennan is managing director of Evolution Time Critical, a Metro Supply Chain Group Company that specializes in the provision of emergency logistics expertise to the global automotive industry. Evolution Time Critical operates control centers throughout Europe and in Atlanta, GA. 

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