In this article from Supply Chain Digital, Mike Thoeny, President of the Automotive Business Group at Flex; offers insight into how the automotive industry can alleviate supply chain challenges.
He explains what the best practices from other industries are that the automotive sector can adopt?
Three key areas stand out: regionalisation, multi-sourcing, and collaboration.
Regionalisation: Manufacturing in-region can help overcome risks to business continuity arising from tariffs, geopolitical tensions and supply chain disruptions. It not only helps mitigate risks but also offers other benefits such as improved responsiveness to regional customer demand and reduced carbon footprint.
Multi-sourcing: Having multiple suppliers for key components increases agility and resilience, resulting in fewer line stoppages, less recalls, competitive pricing and faster time-to-market. While it may involve upfront costs and work, the benefits far outweigh the drawbacks.
Collaboration: By partnering with suppliers and ecosystem partners early in the product lifecycle, automakers can align roadmaps, define desired features and secure supply continuity. This approach accelerates innovation and allows for faster response to shifting market conditions.
Why is cross and inter-industry collaboration so important to strengthen the automotive value chain?
The automotive industry is at a critical juncture as it prepares for next-generation mobility.
To deliver on this unprecedented market opportunity, he says, the industry must work as an ecosystem to build a more resilient automotive supply chain. Because no single player can make it across the finish line alone.
Source: Supplychaindigital
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