Supply Chain Management in Automotive Industry

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Global Supply Chain Management
Automotive industry
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Executive summary
This is a comprehensive analysis paper on supply chain management in automotive industry;
there are three main sections to this report. First art elaborate on automotive industry and its
supply chain process with reference to different automobile manufacturing organizations. Second
part discusses the way these companies configure their supply chain with lean and agile
concepts. Third part includes information on role of technological advancement in supply chain
management. Key findings states positive market growth of automotive industry in global
market, developing markets are showing dramatic rise in sales with stagnant growth in developed
markets. Pull strategy is being used to manage supply chain as first customer demand for product
and then further processing is done. Lean and agility are key elements to manage cost, time and
quality. It is difficult to choose any one factor, rather automobile companies need to implement
both concepts, according to market demand, and flexibility plays key role in market success.
Technological advancement has brought shift in manufacturing process with implementation of
electronic data exchange, internet, and cloud computing and real time data sharing facilities.
They help in ensuring all stakeholders are kept informed and communicated continuous
regarding process, it help in reducing paper work, saves time and cost.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Supply chain....................................................................................................................................4
Automotive industry........................................................................................................................5
Supply chain in automotive firm.....................................................................................................5
Key flow in automotive supply chain..........................................................................................5
Product flow.............................................................................................................................5
Information and value flow......................................................................................................6
Financial flow...........................................................................................................................6
Supply chain process....................................................................................................................6
Production planning.................................................................................................................6
Material requirement planning.................................................................................................7
Suppliers...................................................................................................................................7
The as-is process in automotive industry.................................................................................7
Distribution strategy.................................................................................................................8
Supply chain strategies by different automobile companies...........................................................8
Lean supply chain............................................................................................................................9
Agile supply chain...........................................................................................................................9
Leagile supply chain......................................................................................................................10
Role of technology in automobile supply chain............................................................................10
EDI.............................................................................................................................................11
Cloud manufacturing..................................................................................................................11
Conclusion.....................................................................................................................................12
Bibliography..................................................................................................................................13
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Introduction
Global era of business offers both opportunities and complexities. Organizations strive hard to
ensure market sustainability, minimize cost, on time delivery without compromising on quality;
all these activities together work as supply chain management (Blanchard, 2007). It aims towards
process and value maximization to customers and other stakeholders. Effective management of
supply chain helps in gaining competitive advantage. Automotive is a large scale, high
investment complex industry, its supply chain network is dynamic and complex. This paper aims
to evaluate supply chain process of automotive industry, its technological advancement and
application. This paper include introduction on supply chain, automotive industry, its supply
chain components, technological components and their role in performance enhancement.
Supply chain
Supply chain can be defined as functional process that aims to include structural and
infrastructure elements into strategy to enhance business performance (Cetinkeya & al, 2011). It
is initiated with purchase of raw material to delivery of product to end user. Further, supply chain
system of automotive industry is complex due to several components used in manufacturing
process. There is upstream to downstream integration process that is strongly connected to
create customer value and also for small vendors involved in the process. In automotive
manufacturing almost twenty thousand components are being used, these products are purchased
from several tier 1, 2 and 3 suppliers from different markets. Manufacturing process also include
different lean management process, further delivery is also complex (Babu, Prof. KVSN
Jawahar, 2012). There is intense use of technology to manage products, purchase, manufacturing
and sales. Industry factors, uneven demand; market volatility; companies trying to source
products from low cost countries to reduce manufacturing cost and other risk factors. It also
encounter product of high logistics cost, leading to need for better technological advancement to
improve automotive supply chain.
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