Automotive

As a senior leader in the automotive industry, you know that staying ahead of the competition requires constant adaptation to changing market dynamics. One area that demands close attention is your manufacturing and distribution operations and supply chain. 

With six key trends affecting the industry from end to end, it is critical to review your global footprint to ensure future success.

1. Electrification

As consumer demand for electric vehicles grows, OEMs and suppliers must adjust their production processes to meet this shift. This will require investments in new technologies and processes, including battery production, as well as collaboration with new suppliers.

2. Upstream Supply Chain Complexity

With more advanced technologies being incorporated into vehicles, the supply chain is becoming more complex, with more suppliers and parts required. This makes it crucial for companies to have a comprehensive understanding of their eco-system and to invest in technology to streamline your upstream supply chain from perspectives of materials availability, visibility and transportation efficiency.

3. Offsetting Higher Costs and Improve Profitability

As production costs continue to rise, manufacturers must find ways to offset these costs by optimizing their operations. This includes investing in automation and digitization to streamline logistics and transport operations, as well as reviewing their manufacturing and distribution footprint.

4. De-risking and Balancing 

Sourcing and Manufacturing in low-cost regions versus current geo’s where you operate. The pandemic has highlighted the risks of relying too heavily on one region for sourcing and manufacturing. Companies must balance the benefits of low-cost regions with the need to ensure supply chain resilience and agility.

5. Sustainability

Consumers are demanding that companies take action to reduce their environmental impact. As a result, manufacturers must review their manufacturing and distribution operations to reduce waste, increase energy efficiency, and invest in renewable energy.

6. Need for Resilience and Agility

Geopolitical tensions, economic volatility, changing import duties and other factors can disrupt the supply chain at any time. To mitigate these risks, companies must prioritize resilience and agility in their supply chain strategies.

Footprint strategies are a critical lever for companies to ensure future success. This includes reviewing manufacturing and distribution operations to optimize production, reduce costs, ensure access to the right quantity and quality of talent and to increase overall agility. Companies should also invest in technology to streamline their operations, optimize logistics and transport operations chain, select the optimal locations for new activities, build relationships with suppliers, and ensure sustainability. By doing so, you can remain competitive in an increasingly complex and dynamic industry.

In summary, the automotive industry is facing significant challenges that demand a close review of global manufacturing and distribution operations and supply chain. By staying abreast of the six key trends affecting the industry and taking steps to optimize your footprint strategy, your company can position itself for success today and in the future.