Today’s global supply chain leaders know to expect the unexpected. They prepare for natural disasters, sudden regulatory changes, social and economic shifts, and even cyber attacks. But some events are more disruptive than others. The recent outbreak of coronavirus has shaken communities and put companies that rely on manufacturing from facilities in Wuhan, China at risk.
With the pace of change in the automotive industry as of late, making any predictions seems a bold move. It’s hard to imagine what the next twelve months and beyond hold for an industry facing seemingly non-stop innovation. But in 2020, I expect we’ll see this pace of innovation continue. Here are a few predictions for the year ahead.
The electric age accelerates
As the millennial and Gen Z cohorts continue to become more of the buying market (by 2020 they will make up 64% of the world’s population according to Forbes), their preferences will only further dictate where the industry leans. With electric options becoming more affordable (see models like the Nissan Leaf), the continued growth of electric vehicles is likely to rise as this play into the buying preferences of these generations. In order to maintain relevant, or gain relevancy, with that share of the market, automotive leaders will continue to invest and innovate in electric vehicles.
The uncertainty around tariffs and trade wars has left many supply chain professionals feeling confused and overwhelmed. What is going to be imposed and when? How is this going to impact my organization? What costs are we going to incur and how can we manage them? Can we shift sourcing strategies and what impact will that have on my network? But before we make any major moves, what’s really going to happen and when?
In the automotive industry, the imposition of new tariffs can have major cost implications. Given the complexity of automotive supply chains, OEMs are dealing with thousands of parts and thousands of supplies to deliver a finished product. This can mean that key suppliers are based in regions where steep tariffs would be applied, or that the production process of a component could cross borders multiple times before becoming a finished part, being hit with a tariff at each crossing.
The days of preparing for new trade policies are over. For decades, companies were given advance notice of coming tariff announcements, with time to adapt to the upcoming changes. But that has changed in today’s “tweet today, implement tomorrow” pace of business. That speed and volatility have opened the door for a new style of global trade management to emerge. A recent Aberdeen Group survey of 126 companies identified the organizations that excel at global trade management and the key factors that drive their success.
Travelling is my ultimate passion. Even when it’s just a quick trip, setting up a routine in a different city or country helps me to think out-of-the-box as different cultures can have very different aspects of daily living.
Walking in the streets of a new city is a perfect workout for my brain as it helps me quickly become familiar with my surroundings and have the full experience.
I’ve been travelling as much as I can, wherever possible.
I have to say though, if you like travelling, you have to like being in airports and you must be willing to deal with the complex services structure it provides — which starts and ends with your baggage.
In today’s fast-paced world, success means getting ahead of change, not just keeping up with it. It’s no different for your supply chain. Growing customer demands.
Shifting regulations. Big impact events like natural disasters. It’s no wonder companies are looking for hyper-agile, synchronized supply chains.
But are they looking in the right place?
When your supply chain isn’t functioning, the signs are clear: missed opportunities, customer complaints, unexplained errors and overstretched planners. Diagnosis is easy, but change is hard.
We’ve all heard stories about the company that spent thousands of dollars and years of work on transformation only to make negligible gains. These stories have created fear and persuaded many companies to stick with outdated solutions long after they’ve outlived their utility. It’s time for companies to readjust their beliefs and revive transformation’s good name.
The automotive industry is in the midst of unprecedented change driven by a trifecta of emerging technology, rapidly evolving consumption preferences and dramatically shifting business landscapes. All three drivers combine to further complicate the already complex and high-volume vehicle supply chain – and the supplier sub-chains that feed into it. The need for flexibility, agility and resilience in the supply chain has never been greater.
So how are automotive leaders overcoming these challenges? They are leveraging the right technology at the right time, focusing on three key areas: scalability, intelligence and concurrency.