Page 25 - Logistics News - June/July 2021

AUTOMOTIVE SUPPLY CHAIN

chip manufacturers to fulfilling demand from these other to see where orders and goods are in the network, enabling
sectors. When automotive demand bounced back earlier collaboration and synchronisation between partners,
than anticipated, the limited supply was painfully exposed. customers, dealers, etc.

The microchip crisis mostly emerged due to the On the demand side, many automotive companies
semiconductor industry’s diamond-shaped supply increase visibility through customer preference research,
chain. In this type of supply chain network, only a few creating better forecast models and mix levels. Achieving
manufacturers are completely vertically integrated and visibility into the demand and supply outlooks allows for
self-reliant as most manufacturing is outsourced to sub-tier early detection of risk so better decisions can be made sooner.
suppliers who are often capacity constrained and stretch
lead times. Any disruption at the sub-tier level directly Creating a culture of providing visibility to the network
affects the tiers above, and indirectly affects the original sounds great, but it’s difficult to achieve. The ability to share
equipment manufacturers (OEMs). information both within and outside the four walls of the
company is constrained by behaviours built over decades.
OEMs with visibility into sub-tier supply levels Some of these behaviours need to be dismantled so higher
are better positioned to identify bottlenecks early levels of trust are established and to generate this degree of
and better manage the crisis. Now manufacturers are visibility.
starting to realise that supply chain visibility and supplier
collaboration are no longer ‘nice-to-have’ capabilities, To build this level of trust, digital ecosystems should
but have become table stakes for staying competitive or incorporate stringent identity and access controls related
in business at all. The key is harnessing visibility to build to network participant activities and data access. Multi-
resilience. enterprise collaboration platforms or digital supply
networks provide the appropriate security that can
Sustained collaboration only comes when transparency foster more trusting behaviors and user adoption of new
creates trust across the network. Supply chain visibility can technologies within the network. This encourages OEMs
carry different meanings depending on who you ask, but and suppliers to share information at scale in a sustainable
at its core it’s about providing transparency and access to manner that wasn’t possible before, which is the key to
supply chain events. This gives the organisation the ability creating an agile and responsive supply chain.

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