New approach to supply chain management can safeguard vehicle manufacturers and avoid slowdown of industry growth
Now is the time for vehicle manufacturers to implement proactive contingency planning to successfully avoid the harmful ramifications which can be felt during summer shutdowns, warns emergency logistics specialist Evolution Time Critical. Seasonal downtime of Tier 1 and 2 suppliers poses an annual threat of supply chain disruption, unplanned assembly stoppages and potentially costly reputational damage for vehicle manufacturers. Supply chain visibility is increasing due to a greater awareness of its potentially crucial role in optimising production, and this can be utilised to put into place resolute strategies before it is too late.
“Every year we are required to provide just-in-time delivery expertise for OEMs who encounter supply problems during the summer shutdowns, but proactive planning in early to mid summer can safeguard vehicle manufacturers’ operations and ultimately save them money,” says Evolution Time Critical managing director Brad Brennan. “Awareness of the benefits brought by optimising supply chain operations is increasing, but this needs to be complemented by visibility and understanding of inter-chain dependencies. Only with an overview and appreciation of each stage of the supply chain can a resilient process be put into place.”
Proactive over-production to increase buffer stocks that can bridge shortfall of supply, component failure or unforeseen losses is one way that can mitigate supply chain failure. Successful implementation relies on visibility of suppliers’ operations by the vehicle manufacturer, to fully broaden the understanding of which companies supply to whom, when and how frequently at all stages of production.
“Appreciation of individual supply chain nuances and clarity of operations allow for a more fluid process that naturally leads to a more robust supply chain – if vehicle manufacturers can achieve an overall view of logistics operations throughout its Tier suppliers, then individual links can work together to provide a unified contingency: one can look after another, to a degree,” continues Brennan.
“Proactively increasing buffer stocks is reliant on suppliers having the capacity to meet increasing demand, which is especially time sensitive as more vehicle manufacturers are moving to intensified, 24-hour schedules, which of course places heightened pressure on suppliers. Long-lead times, unwillingness or an inability of manufacturers to place orders further in advance, due to factors such as variance of model or specification, makes it more crucial to implement such plans as early as possible.”
Common obstacles that prevent successful exploitation of buffer stocks as contingency include forecasting, costs, lack of infrastructure during shutdown and supplier capacity. To further reduce the risk of supply chain disruption, emergency logistics expertise is able to provide a time critical safety net. Should proactive contingency planning fail to provide a sufficient buffer, specialist knowledge of premium freight, just-in-time delivery methods and international legislation can combine to provide the most efficient resolution and avoid costly reputational or physical costs through delayed delivery.