Automobile supply chains encountering 'new normal'


describe the imageThe recession and the rapid expansion of China have pushed the United States to a so-called 'new normal' and have greatly changed the automobile industry during the past several years. Today, organizations can level the playing field with the proper supply chain management techniques that help reduce overall costs and improve turnout ratios, according to a new report.

In the New Normal, most automotive companies are starting with similar operational efficiency profiles," said industry expert Kelly Thomas. "The basis of competition has moved away from operational efficiency in a given functional area to the operational efficiency of the overall value chain. Over the next several years, automakers face unique opportunities to break from the pack and differentiate themselves."

While there are many things that supply chain managers can do, the report provided a couple tips.


1. Link the supply chain to new products to help manage expenses

One of the key challenges of running an efficient supply chain is handling the budget without overburdening any resources. To do so, executives need to manage the costs with research and development, the expenses incorporated into the supply chain's operations and those that fall under the sales and marketing aspects of the organization, the report said. As a result, costs need to be integrated earlier on in order to constrain budgets.

2. Synchronize sales and marketing

A vital aspect of the automobile industry's supply chain is the ability to manage incoming parts with outgoing sales. As a result, management on the front end of the organization needs to be integrated with that of the backend to ensure there is no overlap or inefficiencies. This calls for an integrated demand platform which configures short- and long-term planning together, according to the report.

One way to do this is by using unified communications, which allows multiple solutions to be integrated into one platform, enabling employees from all over the company to stay connected and collaborate together.

3. Get a global view

With the number of automobile manufacturers around the world, organizations should see how their international competitors are keeping up with demand and the decisions they make to allocate their resources successfully. The most effective way to do this is by integrating multiple views of supply and demand at different tiers of the company, the report suggested. As a result, businesses can make informed decisions about how to stay competitive and, if the move plays out poorly, they will be able to address similar situations in the future with more knowledge.

By addressing these changes, automobile supply chains around the world can remain competitive: