The automotive industry's success is tied to quality, and that's a matter of supply chain management. Operating on the principal that car manufacturers can only be as good as the supplier of their smallest components, participants in this industry are devoting new efforts to measuring and communicating about quality, in service to both the new-car market and the automotive aftermarket.
That effort depends not only on supply chain visibility, but on foresight. Much of the risk in putting a car or truck together is introduced at product development time, which makes the ability to anticipate trends more important than hindsight for any supply chain manager. Decisions are often predicated on such nitty-gritty details as raw materials availability and international currency fluctuations. Those issues have to be addressed three or four years before a vehicle hits the road.
See Also: Global Supply Chain Logistics Management
For example, the new Ford F150 has more aluminum in it than in the past. This material is harder to work with and more expensive than other materials, but Ford is betting on higher gas prices down the line, so the lighter a car, the more fuel efficient. And the new Corvette has carbon fiber parts to take some weight out. GM is even looking at polycarbonates to replace window glass in some cases.
The best supply chain managers in the automotive industry make a risk management checklist part of every vehicle's life cycle—even going beyond the vehicle's original market presence to the aftermarket. For that kind of visibility the cloud can make the market picture clearer, not only for OEMs, but for suppliers from every tier.
Visibility from the Cloud
European automaker Renault SA (www.renault.com/en) is broadening its use of a cloud supply chain platform to support the company's expansion into international markets. Based on a successful live pilot last year covering the spare parts export supply chain from France to key markets such as Brazil, Saudi Arabia, and South Africa, this year Renault will roll out its "Easy Tracker" project, enabled by GT Nexus (www.gtnexus.com), to all export markets around the world.
As part of the company's "2016 - Drive the Change" corporate initiative, the after sales organization is focusing on the high value spare parts and accessory business. The company expects that the visibility and control available through a cloud supply chain platform will help Renault better serve its fast growing international markets and customers, while reducing inventory and transportation costs.
"The emerging markets are very competitive and Renault wants to guarantee spare parts and accessories availability at the best-in-class level, while reducing safety stocks, inventory, and expediting costs," says Francesca Gamboni, after sales logistics vice president at Renault Group. "The ability to have real-time tracking of customer orders and shipments across our value chain is a key enabler."
Greg Kefer, vice president of corporate marketing for GT Nexus, says the cloud platform's contribution to supply chain visibility will prove itself in the automotive and heavy equipment industries as OEMs expand their relationships with logistics service providers.
"The ability to control long, extended multinational supply chains comes down to visibility," he says. "[OEMs] would traditionally get silos of information. You might have a carrier portal to log into or a key 3PL that's providing information on what's happening. If you look at the way supply chains move and how inventory changes custody many times from the moment it's ordered to the point it's delivered, you realize what a challenge it is to see what's going on in real time."
Window to Quality
Respondents to a survey commissioned last year by the Automotive Industry Action Group (www.aiag.org), a not-for-profit association of automotive supply chain companies and related organizations, indicated quality measurement is critical across the chain and must be consistent at every link.