Auto industry rethinking supply chain – survey

Khodrocar - Supply chain disruption and rising material costs are causing the global automotive industry to re-evaluate lean manufacturing principles, according to a survey commissioned by ABB Robotics.

Shifting from ‘just-in-time’ to ‘just in case’ strategies, manufacturers are holding more stock to protect against unplanned disruptions.

A mix of global industry personnel from vehicle manufacturers, suppliers and engineering took part in the survey. Sixty-two percent of respondents cited ongoing supply chain concerns when asked to select their top three challenges to automotive manufacturing while 41% cited the impacts of material and component price increases and 31% pointed to growing labour costs and shortages.

The survey also revealed how manufacturers were turning to increased stock holding and bulk material purchasing to limit exposure to disruption elsewhere in the supply chain, while working with a wider network of suppliers to ensure sufficient availability of parts.

The survey highlighted how the rising cost of raw materials (62%) had already overtaken energy costs (59%) as the industry’s chief concern. Energy efficiency continued to be important, while an identical number of respondents (17%) felt tighter cost management was crucial to the industry’s response.

The ABB survey included close to 600 global industry executives from vehicle manufacturers and suppliers at all levels of management, engineering plus other key professionals in automotive sectors.