Optimising supply chain resilience in the automotive industry

The direction of travel for the automotive industry is clear. Customers must remain a key part of the supply chain strategy, experts say


DDC: Damien de Cacqueray, vice-president, supply chain new projects, Stellantis
RH: Richard Harding, InDigital domain director, global purchasing, supply chain and manufacturing, Jaguar Land Rover
DR: David Richards, chairman and founder, Prodrive
JR: Judith Richardson, global supply chain director, Jaguar Land Rover
AS: Andy Sutton, vice-president strategic accounts, Infor
OR: Ozgur Tohumcu, managing director, automotive (EMEA), AWS

What have you learned from managing your supply chains in the last two years?

DDC: Recent events confirmed that we live in a world of change and that crises can come from anywhere. We have the never-ending semiconductor problem in the automotive industry, and now there is a war in Ukraine. How we operate has had to change, and we have to work with very low stock levels. Having that agility and flexibility is critical, as is managing the supplier ecosystem rather than individual suppliers.

AS: Infor partners with several leading global brands in the automotive industry, and the challenges have been extreme in the last two years. It has become clear to all businesses that cloud computing is key. Infor has benefitted from its strategic partnership with AWS in maintaining to deliver multimillion dollar projects globally; using remote working and collaboration tools to ensure projects are delivered on time and to budget, despite the travel restrictions and lack of face-to-face meetings which would be the norm. The provision of robust, scalable and agile industry specific cloud solutions has enabled Infor to maintain its service levels in this challenging time for businesses, globally.

DR: At Prodrive, we have learned to be more adaptable and flexible and apply our innovative approach to different uses. For example, we produced a low-cost ventilator during the pandemic in a project with the University of Cambridge. Also, we collaborated again to create rapid-flow coronavirus test kits in just eight months.

JR: At JLR, we have learned there needs to be greater transparency across the supply chain and coverage of our suppliers. To ensure we have the best outcomes, we need to understand what’s going on in real time, where essential parts are and where the gaps might be. Our transformation project, which I’m leading, focuses on transparency and collaboration.

RH: We have put digital at the heart of the supply chain at JLR. We’ve created a digital organisation that supports the broader business with data science, automation, analytics and predictive modelling. Of course, there is still more to do, so we can bend and flex the requirements of our customers, but we are being much more responsive.

OT: Business agility, and greater end-to-end visibility of the supply chain, are enabled by cloud computing. Servers can be spun-up in minutes, it provides scale across continents and has been a game-changer for AWS’ customers and partners. There is a big trend of collaboration, too, where original equipment manufacturers, logistics service providers, and even dealers are sharing data that used to be siloed.

How are today’s supply chain challenges accelerating the pace of change?

OT: First, the pandemic and the geopolitical crisis sparked by Russia have exposed supply chain vulnerabilities. Automation can help, but we also need to make supply chains more sustainable and supportive of circular economies.

AS: There is now more collaboration and ‘co-ompetition’ in the automotive industry. Most organisations realise that 80% of the data they need sits outside their existing business, so there is an excellent opportunity to expand the ecosystem and choose expert partners who can help gather that data. With the right partners, and by utilising artificial intelligence and machine learning, organisations can move from a reactive to a more proactive to, ultimately, a more predictive business model over time.

RH: The pace of change in powering digital transformation requires top-level support, and we are lucky to have a digitally literate CEO. We know the direction of travel, and we know we can get there with that leadership. For instance, in response to the semiconductor issue, and thanks to the cloud, we have created tools to revitalise smart business layer solutions.

JR: Cybersecurity is a massive focal point for us. It’s front and centre of what we’re doing in the supply chain digital transformation. JLR needs to take a leading role to ensure we are robust in our cybersecurity requirements. Likewise, our suppliers must understand the importance of cybersecurity. To echo others, the keyword here is ‘collaboration.’

Digital is clearly the direction of travel. But the main question has to be: how can we provide a superior customer experience? The automotive industry must look to other industries for cues

DDC: There is a strong request for safe and affordable mobility, and the industry has realised that we need to provide sustainable solutions, so that is a significant challenge we face. Producing electric cars remains expensive compared to internal combustion engine cars. That has a huge impact on supply chains but reaching carbon neutrality is a must and something we owe to all our communities.

DR: Thank goodness I don’t have the supply chain problems that many in the automotive industry have. It is an exciting time, though, and people’s perceptions of, for instance, electric vehicles need updating. Prices are coming down while their battery range and performance are improving. Motorsport is responsible for many innovations we see on the roads.

To what extent are automotive organisations technology businesses?

OT: Vehicles are becoming software-based products. In some new car models, there are hundreds of millions of lines of code. Digital is clearly the direction of travel. But the main question has to be: how can we provide a superior customer experience? The automotive industry must look to other industries for cues.

JR: Data is so important to inform that superior customer experience, as that is where you will learn about customer behaviour. From a supply chain perspective, having greater visibility and transparency will improve resilience and mapping capabilities and show the provenance of the vehicle for the customer. Sharing that knowledge is increasingly crucial for the customer experience.

RH: Clearly a sustainability agenda is paramount. Those who don’t follow that will be left behind. Visibility of the supply chain ecosystem is vital. For example, in the future we would want customers of new vehicles to be reassured that they know where their battery has been mined through to where it is assembled. It’s tough to map everything out, but technology makes it easier.

DDC: The sustainability agenda, which the automotive industry must accelerate, is definitely not straightforward as we operate in a cash-driven industry. [Sustainability] cannot be done without the digitalisation of the supply chain, though. We now have a tremendous and unique opportunity to connect with customers and the supplier ecosystem and improve visibility.

DR: Most motorsports companies have developed a technology group that works with a range of manufacturers. Together they look at likely challenges and opportunities a decade into the future. Some projects we are working on today might not see the light of day for years, or indeed ever, but manufacturers have to hedge their bets by investing in several technologies at the moment.

AS: Most of Infor’s automotive customers are now building technology campuses alongside their main production facilities, and innovation is at their core. It is becoming more apparent that the vehicle of the future will be an environmentally friendly, super-smart, connected device, whomever is driving it – whether it’s a person or a machine. The need for innovation and investment is a constant and digital transformation has a clear role in bringing those products to market faster.

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