Analysis of Global Supply Chain Issues in the Automotive Industry

This report examines the multifaceted challenges within the global supply chains of the automotive industry, focusing on issues such as trade regulation violations, breakdowns in cross-border shipments, the inability to keep up with modern customs technology, and inventory management complexities. The report uses examples from companies like Audi, Toyota, BMW, and Mercedes-Benz to illustrate these problems. It then explores potential solutions, including the implementation of software like Microsoft Dynamics GP and SAP SCM, and the adoption of smart automotive supply chain strategies. The analysis highlights the importance of compliance departments, automated solutions, and modern technologies to mitigate risks, reduce costs, and improve efficiency in the automotive supply chain. Furthermore, the report emphasizes the need for inventory optimization and the strategic use of technology to enhance supply chain performance and meet customer demands effectively.

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Name of student
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Answer of question:
Increased international shipping volumes leads to the increase in the exposure to
the Trade Regulations Violations: The global trade regulations alters often, and balancing
the compliance with the business requirements represents the challenges to most of the
experienced teams of the supply chains. In the situation of the automotive company Audi,
where the marketing and the supply of the cars is done all over the world, the regulations and
the compliance rules affects significantly (Kersten, Blecker and Ri 2015). They are
considered to be not properly prepared for the operating in the global marketplace. With the
threat of the severe penalties for the non-compliance, the compliance department could play
the critical role in the strategy of the supply chain of the company. Microsoft Dynamics GP
could be considered as the accounting software or the ERP software package that could be
used by the organisation for improving the supply chain management and track the delivery
orders of the company using the enhanced methods of distribution, advanced picking,
demand planning and the inventory management. The rule that could be applied is the
weakest link rule that denotes that the strict compliance team at any one location denotes
nothing when there are some gaps in the customs skills in the company at any other locations.
Until, the adoption of the automated solutions is done by the experts of the company, the
business could face the significant issues that could lead to the exposure to the significant risk
(Bode and Wagner 2015).
Major breakdowns in the cross-border shipments: The global nature of the present
business environment world could denote that the businesses should offer the varied product
line for meeting the demands of the customers in the various countries. With the goods being
exported and imported from the various countries, it is of high probability that the companies
remains on the top of the dizzying array of the trade regulations. The sole mistake in the

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compliance like the missing of any of the present regionally applicable classification and the
requirements of licensing could mean that the company might face significant dangers in the
delivery of the product to the appropriate location. This resulting delay leads to the
compromising of the complete supply chain and then it also negatively impacts the ground
line. This is major problem in the Toyota corporation. In this organisation, the business
makes several production and the import from the outer countries. The cost of the supply
chain of the company could rise due to the delay of the delivery of the products (Matsuo
2015). The discoveries suggests that the outsourcing is one of the major potential areas of the
opportunity of altering the costs. The SAP SCM could be implemented in the organisation for
reducing the time that is spent in the delivery of the products to the end-consumers. The
smart automotive supply chain could be implemented for practising the complete advantage
of the increased interconnectivity, instrumentation, and the intelligence for reducing the costs
(Chopra and Sodhi 2014). With the utilisation of the capabilities, this majorly maintains the
optimal inventory of the incoming materials, spare parts, finished products and the
accessories that are spread across the distribution centres and several repair shops of the
dealers.
Inability of the keeping up with the modern customs technology: The previous decade is
under the steady progress in application of the technology to the requirements of the customs.
The electronic systems are being implemented for the replacement of the outdated processes
of the customs as the automization grows to be the priority for the trade authorities all across
the world (Das et al. 2016). The modern initiatives implements the various techniques for the
fulfilling of the requirements like the advance fillings of the e-manifest and the innovative
licensing and the documentation requirements. The company BMW was facing this issue in
their management of the integration of the modern supply chain in their company process.
The company is forced to the alteration of the procedure and also migrate to the entirely

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innovative software platforms. In the global supply chain, the integration of the modern
technologies is growing to be immensely challenging (Ravindran and Warsing Jr 2016). The
proper implementation of the policies and the management of the regulations all across the
world could be managed by the implementation of the information system in the organisation.
It would provide the updated information regarding the various regulations in the markets to
the company. The BMW company is facing this issue but with the proper analysis of the
requirements of the company and implement the innovative solutions in the supply chain. It
led to the enhancement of the business strategy for managing the varied challenges and the
issues in the supply chain.
Inventory challenges in the global supply chain: The company Mercedes have been facing
several challenges in the management of the inventory. The company is significantly
investing in the global reorganisation of the supply chain network, which would set course of
the growth and the efficiency with the intention of the reduction of the supply chain costs by
almost 20 percent per vehicle (Fawcett and Waller 2014). This reorganisation involves the
expanding of the global production and the network of the supplier closer to the customers as
well as the markets. The extensively complicated received materials of production flows at
the plants of the Mercedes Benz and transport of the innovative manufactured vehicles from
the facilities of the production would be increasingly centrally managed in the more efficient
and the flexible manner. For eliminating the issue of the inventory management, the company
implemented their sole focus on the securing of the supply of the materials in the global
networks of the production that leads to the reduction of the inventories, guaranteeing the on-
time and regular deliveries of the modern vehicles to the customers all across the world, and
the incorporation of the logistics organisation in the constant advancement of global network
of production at the early stage (Tachizawa, Alvarez-Gil and Montes-Sancho 2015). The
implementation of the SAP SCM could help in the improvement of the productivity of the

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staff and the tasks that are associated in the supply chain of the Mercedes. The accurate
forecasting of the amount of the inventory that is required for the business could be
determined using the SAP SCM. The innovative strategic methodology had been presented in
the grand opening of new consolidation centre of Mercedes Benz in the country of Germany.
The organisation could implement the SAP for the improved management of the inventory of
the organisation. The SAP SCM process assists the suppliers, manufacturers, retailers,
customers and the business partners to connect efficiently using the single platform and share
the valuable information in the organisation.

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References
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