AUTOMOTIVE SUPPLY CHAIN
Table of Contents
Introduction 2
What are the problems faced by various automotive supply chain members 3
Companies that are using Automotive Supply Chain 7
Case studies that are facing similar issues of automotive supply chain 7
Ways in which those companies solved the issues 10
Conclusion 11
References 13
Introduction
According to the recent business culture, it can be stated that innovation and science are creating a massive impact on the overall responses; however, without the utilization of the technologies properly, the accurate result cannot be achieved too. Based on the business culture, it can also be stated that the supply chain is one of the important aspects of the business, which is helpful for the organization to meet its market demands and requirements. On the other hand, an accurate supply chain is responsible for creating a network that exists between the organization and its suppliers, which is further produces and distributes the final good to the customers. In order to create an accurate supply chain, the incorporation of different factors like people, information, action, resources, entities, and others play a vital part.
In this case, a detailed understanding of the automotive supply chain will be gathered; an automotive supply chain is responsible for meeting the requirement and demands of the customers regarding the cars, trucks, and other vehicles. Furthermore, based on the working needs of the process, it can be mentioned that in the Market scenario, it is one of the most complex processes of the supply chain that needs detailed attention from the organization, which further presents a profitable return to the organization as well. In this report, a detailed understanding of the automotive supply chain has been given, which is responsible for defining the supply chain process on a clear term as well.
On the other hand, based on the automotive supply chain, it can be stated that there are various external and internal factors creating an impact on the performance value of the organizational culture. On the other hand, with the help of this study presentation, learning about the topic in a detailed manner will be possible. Moreover, the organizations that are currently using various approaches to the automotive supply chain can be learned too. Apart from this, the ways the companies are dealing with rising automotive supply chain threats can be learned on clear terms as well. Based on the entire approach drawing a proper conclusion becomes easy.
What are the problems faced by various automotive supply chain members
The automotive supply chain has so many benefits associated with it, for example, the improved understanding of innovation or innovative security value. Despite this aspect, the automotive supply chain faces different issues and threats that are defined in the following in a detailed manner:
Inventory control
The first threat in the case of the automotive supply chain is related to the management of inventory approach; in many cases, the organizations are not able to monitor all its innovative aspects, which create a direct impact on the performance value. In many cases, the poor management of the inventory approach of the automotive supply chain often leads to the late delivery of the products, which is a result of poor supply chain management.
Aligning production cycles
Apart from this, in many cases, the industries are unable to produce an automotive supply chain that meets the demands of the customers. The prime reason which is influencing this threat is related to the changing market demands and trends. The market trends regarding the automotive approach are changing every other day, which creates a direct impact on the entire automotive supply chain value as well.
Forecasting future
Another important threat related to the automotive supply chain is poor future prediction; in many cases, poor future prediction often leads to the threatening situation of the company value. In many cases, the forecasting often drives future planning of the company, and poor forecasting approach leads to mismanagement of the automotive supply chain, which in most cases presents a poor and negative result.
Overstocked inventories
In the last few years, the automotive supply chain is growing its business in a positive manner; however, along with this fact, the oversupply of the inventory approach is increasing as well. In many cases, the companies that supply inventory approach often produce extensive inventory aspects, which lead to over sticking, and overstocking leads to wastage of the production value too.
Just-in-time operations
Another important threat that is visible in the case of the automotive supply chain is related to Just-in-time operations. The main reason behind this issue is related to the poor future prediction which lacks visibility of the company, in which the organizations are not able to plan and strategize properly which in most of the cases leads to the fact where it takes last minute action, this approach can lead to poor management result in many cases too.
Control over Supply Chain on a Global Scale
An automotive supply chain supplier or distributor is known for meeting the needs of the international market. Therefore the global pressure of the supply chain is able to create a negative impact on the profit margin of the organization as well. Managing costing and time in global management often work as a hurdle in the case of the automotive supply chain (Vanalle et al. 2017).
Rising recalls
In the current automotive supply chain procedure, the sheer amount of recalls are creating an impact on the production cost. The supply chain failure is able to create a direct impact on the entire system, which is capable of running the customer satisfaction value, which is able to create an impact on the poor customer reputation as well as global automotive supply chain procedure is full of negative consequences.
Automotive Supply Chain
(Source: Qamar, Hall and Collinson, 2018)
Logistics Chain
The logistics chain in the automotive industry needs to be accurate too. Changes in the logistics value create an impact on the competitors; in the changing seasons, operations management creates a negative on the company’s organizational culture. The poor management of the operational actions of the logistics department leads to negative organizational results as well.
Partner with LSS for Automotive Supply Chain Support
In many cases, organizations often deal with poor third party management. In the supply chain work culture, the third party is responsible for maintaining the entire company result in a proper manner. Poor management of these aspects leads the entire automotive supply chain actions in a negative direction.
Cost and Location
The manufacturers of the automotive industry always demand local suppliers as by doing this, they can save their budget value. Choosing a proper local location for supplying needed goods can create a positive impact; however, in the global automotive supply chain process, local suppliers are mostly not that efficient, which creates an impact on the performance value as well as on the monetary value too.
Environment and Ethics
The environmental impacts on the automotive industry create a major impact as the changing environmental needs often influence the organizational supply chain on negative terms. If the automotive supply chain is not maintaining the environmental needs, then the taken decisions will not be ethically right, which has the possibility of creating an impact on the organizational result too.
Automotive Supply Chain
(Source: Chen et al. 2020)
Tracking the Geographic Expansion
In most of the automotive supply chain case tracking, the global expansion is tough as the planning to facilitate the entire logistics approach often leads to poor management, thus impacts poorly on the company culture too.
Companies that are using Automotive Supply Chain
In current years there are various organizations that are using the automotive supply chain in order to increase their overall productivity and performance value; among them, Amazon and Alibaba are using this supply chain procedure in a positive manner. Apart from them, PepsiCo’s Frito Lay Operations, Zappos, IKEA, FedEx, Superhub, Wal-Mart, and others. In addition to this aspect, it can be stated that all these companies are efficiently using the automotive and innovative factors in their company, which are further creating a positive value to the overall performance value (Tavčar, Demšar and Duhovnik, 2018).
Case studies that are facing similar issues of automotive supply chain
According to the above mentioned companies’ names that are using the automotive supply chain, it can be stated that despite achieving so many organizational and market values, these organizations are facing a few threats from the process too. In the following section, the issues have been discussed in a detailed manner:
Amazon
The first thing that is related to the automation in logistics is the robots that are picking and packing the warehouse orders. In terms of the automotive supply chain approach, the name of Amazon cannot be denied. The company has a huge global presence, which makes its supply chain value an important approach too. Therefore the company is implementing automation and digitalization, which creates an impact on the performance value of the organization. However, in current years, the organization is facing a few automotive supply chain threats that are capable of creating a negative impact on the performance value.
Automotive Supply Chain
(Source: Coronado Mondragon and Coronado Mondragon, 2018)
Competitive advantage is one of the main threats faced by Amazon’s automotive supply chain approach; in most of the cases, the organization is unable to identify the needs to changing market needs and the customer’s demands that are responsible for creating an impact on the company’s performance rate. Apart from this, another issue faced by Amazon’s automotive supply chain management is related to overstock, as the company, in many cases, in order to achieve more profit, produces goods on the massive range, which increases the overstock value of the company (Das, 2020).
On the other hand, apart from these, there are few other important threats also faced by Amazon in terms of its automotive supply chain, such as the presentation of global market expansion; in many cases, the company is unable to track the global market’s trends that create an impact on its automotive supply chain process. Furthermore, the issue related to the logistics management while it is incorporated with the innovation and automation can create a threat, as any kind of mismanagement of the approach is responsible for creating a long term impact on the performance Rate of Amazon (Russo, 2019).
Zappos
Zappos is the world’s largest global organization that is utilizing the benefits of the automotive supply chain in an accurate manner. The company is most famous for selling shoes on an online platform with the help of a drop-shipping business model. The company is known for supplying the products within 24 hours of the purchase. The company is known for using a fully automated warehouse service, which is responsible for shaping the entire company culture in a positive manner, and that increases the profit margin of the company too.
Automotive Supply Chain
(Source: Sharma and Bhat, 2016)
However, despite all of these benefits, the organization does face a few of the automotive supply chain threats that are defined in a detailed manner in this study paper. Customer service is one of the main issues which created an impact on the organizational automotive supply chain, as due to this issue, the organization was unable to understand the market needs, and the presentation of the company service hampered on a massive level due to this factor. Another major threat Zappos faced in its automotive supply chain process is related to the understanding of the international market. The poor understanding of global needs created an impact on the entire supply chain procedure (Taleizadeh, Alizadeh-Basban and Niaki, 2019).
Apart from these, other threats regarding Zappos’s automotive supply chain created an impact on the performance value are the inventory management, where at some point, the company’s visibility decreases the management of innovation and creativity. Another issue that is responsible for creating a threatening situation on Zappos related to vendor relation where the poor relationship with the raw material supplier created an impact on the entire supply chain process of the organization (Delic. and Eyers, 2020).
Ways in which those companies solved the issues
Based on the organizational definition, it can be stated that both organizations have tried their best to deal with the rising threats of the automotive supply chain.
In the case of Amazon, the solution that has been used by the organisation is related to forecasting; with the help of this method, Amazon is able to deal with the threats of changing market trends. In addition to the forecasting approach learning about the areas that will be effective in the future can be learned too. Apart from this, there are other factors used by Amazon, too, that can be effective for dealing with rising threats, such as improving the operational approaches that can be effective for dealing with rising threats. On the other hand, Amazon also implements improved IT values, and by doing this, the company can increase its supply chain issues of the warehouse. By enhancing the security value of the automotive supply chain, Amazon can mitigate operational threats on positive terms as well (Sinhaet et al. 2016).
On the other hand, Zappos is implementing different solutions as well in order to deal with its automotive supply chain issues. For example, the company creates a special focus on its customer service improvement, where it is trying to learn about the customer’s needs and try to fulfill them. Furthermore, the supplier relationship is another important fact that is being aimed by the company in order to improve, and that has directly affected its supply chain performance as well. The company is creating a partnership with the 3PL, and by doing this, the organizational automotive approach can be improved that will bring its services to the next level as well (Vieira et al. 2019).
Conclusion
Based on the entire study presentation, it can be stated that in current business, the importance of the automotive supply chain cannot be denied, as based on this business process, the organizations are able to create a connection between organizational actions and innovative approaches. Furthermore, depending on the study report, it can be stated that this supply chain process is one of the complex business activities; however, proper utilization of this process can create a positive impact on the company’s profit values. Based on the study report, it can be mentioned that it has so many benefits associated with it, such as safety compromise cannot be found in this process. Moreover, it can be customized as any shape and size. On the other hand, it is responsible for creating a green environmental value, which is another important value of the automotive supply chain. Furthermore, the process is responsible for leading the entire approach to workforce optimization.
Apart from this, the study paper is responsible for defining the threats that are visible in this process can be learned too. According to the report, threats like changing market trends or changing customer demands are responsible for creating a long-term impact on the organizational approach of the automotive supply chain. Furthermore, in current years, companies like Amazon and others are utilizing the innovative approach in a proper manner, which is further responsible for presenting a detailed understanding of this supply chain method. Moreover, learning about the procedures in which the companies are dealing with its rising automotive supply chain threats s can be learned in clear terms.
References
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Das, S., 2020. Multi echelon supply chain design for Amazon private brands (Doctoral dissertation, Massachusetts Institute of Technology). https://dspace.mit.edu/handle/1721.1/126953
Delic, M. and Eyers, D.R., 2020. The effect of additive manufacturing adoption on supply chain flexibility and performance: An empirical analysis from the automotive industry. International Journal of Production Economics, 228, p.107689. https://www.sciencedirect.com/science/article/pii/S0925527320300815
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Russo, M., 2019. 13 Digital transformation in the automotive supply chain. Economic Policy, Crisis and Innovation: Beyond Austerity in Europe. https://books.google.com/books?hl=en&lr=&id=ENa_DwAAQBAJ&oi=fnd&pg=PT201&dq=automotive+supply+chain+of+amazon&ots=-fqCGW8Vf3&sig=PIp1fKRt77qBYYkvajU2wZFIRgw
Sharma, S.K. and Bhat, A., 2016. Risk mitigation in automotive supply chain: An empirical exploration of enablers to implement supply chain risk management. Global Business Review, 17(4), pp.790-805. https://journals.sagepub.com/doi/abs/10.1177/0972150916645678
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Taleizadeh, A.A., Alizadeh-Basban, N. and Niaki, S.T.A., 2019. A closed-loop supply chain considering carbon reduction, quality improvement effort, and return policy under two remanufacturing scenarios. Journal of Cleaner Production, 232, pp.1230-1250. https://www.sciencedirect.com/science/article/pii/S0959652619319146
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Vanalle, R.M., Ganga, G.M.D., Godinho Filho, M. and Lucato, W.C., 2017. Green supply chain management: An investigation of pressures, practices, and performance within the Brazilian automotive supply chain. Journal of cleaner production, 151, pp.250-259. https://www.sciencedirect.com/science/article/pii/S0959652617305012
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