Agile automotive manufacturing footprint increases need for contingency provided by just-in-time expertise
Robust supply chain agility is becoming more crucial as vehicle manufacturers increase focus on production costs and adopt strategies that allow more frequent, ubiquitous changes of production location.
Locality is no longer enough to guarantee business for suppliers as price and the ability to deliver, without fail, become the main drivers. Dependable Tier 1 and 2 supply is critical for the continued growth of the automotive market and drives the need for globalised production, which brings its own risks and need for contingency planning.
Emergency logistics specialist Evolution Time Critical’s recent work to implement a just-in-time shipment of replacement tooling parts between continents for a Tier 1 company supplying a major OEM highlights this trend, and demonstrates the importance of long-term supply chain integrity. This shipment brings to light a risk in an industry driven by competitive pricing.
“The long-term durability of supply chain links is crucial as the automotive industry extends its manufacturing footprint and reacts quickly to new low-cost production opportunities,” says Evolution Time Critical managing director, Brad Brennan. “We have previously worked with a Tier 1 supplier who wished to move tooling and switch live production from Mexico to Morocco. The main risk was the potential to leave a gap in the supply chain while the tooling was re-sited across continents, and we managed a seamless transition with no interruption of production for the OEM. However, in this recent case tooling was damaged by the haulier while in transit to a new production location – emergency logistics were required to deliver vital parts across the Atlantic in time for repair, which enabled production to restart before a breakdown of the supply chain.
“We have seen Tier 1 customers moving production lines to make a more flexible and efficient supply chain across the globe,” continues Brennan. “This shipment proves that, as the trend continues to grow, new challenges emerge and emergency logistics will evolve to meet this requirement.”
Evolution’s recent shipment demonstrates the importance of continuity of supply at all levels of the chain. Emergency logistics facilitated time-critical coordination between suppliers across continents and delivered on time, without which serious delays, production downtime and costly stoppages would ultimately be passed on to the vehicle manufacturer. Dependability of the supply chain builds future confidence between vehicle manufacturers and Tier 1 and 2 suppliers, and strengthens links for investment.