A shared understanding based on trust and transparency
A shared understanding based on trust and transparency
Two years of global supply chain disruption and no sign of it going away soon has resulted in an automotive industry that is very risk averse. Production is still lagging because of parts shortages and some of the world’s busiest ports are congested with containers. Lead times are stretched out and freight costs are high. The volatility in the supply of parts right now bewilders all previous means of being able to predict and respond.
On the bright side there are signs of production recovering to levels of output not seen since before the pandemic. However, the critical shortage of vehicle delivery drivers around the world suggests the crisis is simply going to shift from inbound to outbound sector. Every single vehicle made at the moment is important and better visibility on the status each of them is essential in the face of capacity shortages and delay.
In response, vehicle and parts makers are working with their supply chain and logistics partners to revise operational processes and accelerate the adoption of digital tools. Those tools are needed to gather and analyse data, and apply it in more dynamic, proactive and predictive strategies. Ingenuity is the name of the game, and the game is to gather as much information as possible in real time along the full length of the supply chain, in and out of the factory, and shine a light into any dark corners.
At Volkswagen the importance of investing in digitalisation is now recognised at the top management level. As revealed in this winter edition, the carmaker is making big investments to improve transparency in the network and make it more sustainable. Furthermore, the carmaker is making these improvements in collaboration with transport partners to achieve tactical and strategic planning in a matter of hours rather than weeks.
To take another example from this issue, Nissan North America is on the lookout for areas in its supply chain where automation can make the delivery of vehicles more efficient. The carmaker is carrying out a comprehensive review of reporting and planning processes to root out inefficiencies and identify where technology can be applied to improve the delivery of its cars. That includes looking at route optimisation with its car carriers, with volumes allocated in mind of faster turnarounds for reloading and distribution.
The overhaul of supply chain planning and process, and the priority of digital tools to achieve greater visibility and a more agile response to risk, is a central tenet in the fast-paced transformation going on at Lotus Cars. In our cover feature, Mike Dickinson, executive director of supply, explains the carmaker’s Vision80 strategy aimed at making Lotus a globally recognised and profitable premium sportscar maker with a future in electric vehicles.
The cars Lotus is making now, including the Emira sportscar and Evija hypercar, are symbols of its ambition for global recognition. The company is developing multiple locations for production across the world. It has invested heavily in making its flagship Hethel plant in the UK a facility of the future. It is also to begin production in 2022 at a plant in Wuhan, China run by its majority stakeholder, Geely.
A shared understanding between manufacturing and supply chain logistics about material flow has been key to that development over the last 18 months and there have been some fundamental operational changes, including to purchasing and supply chain performance.
Getting the supply chain organisation to better align is crucial to Lotus’ long-term goals and it is already showing performance improvements.
Lotus, and every other OEM out there at the moment, are caught in a careful balancing act between negotiating the volatile present and focusing on a favourable future. The only way to stay on the level is to look at the supply chain in its entirety, make it as transparent as possible and only collaborate with the partners you trust.
Editor, Automotive Logistics Digital Editions
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