The lack of visibility into supply chain logistics has been a long-standing challenge for automotive manufacturers. Manufacturers have needed to factor in wastage due to delays, disruptions and obsolescence, maintain inefficient inventory levels, and deal with unpredictability that negatively affects their ability to forecast and plan accurately. With a big part of their working capital in transit, companies can take months, or even years to recover from an unforeseen disruption.
At the supplier end too, dealing with over-capacity in the recent downturn has resulted in consolidation, and often relocation of plants, affecting capacities, routes and costs. Consolidation has also meant that in many cases, OEMs are dependent on one or two suppliers for a bulk of their requirements. This intensifies the impact of any supply chain disruption.
A bigger role for GIS in the automotive supply chain management is inevitable. Its ability to provide extended, real-time visibility across the OEM’s value chain is a compelling proposition at a time when systematic mitigation and management of supply chain disruptions is gaining priority. But what will really unleash its value is a more integrated approach to GIS applications, combining information with planning and execution capabilities.
Supply chain disruptions affect not only bottom lines, but also an OEM’s ability to compete in the market. With certain leading global OEMs already experiencing the benefits of faster response times, reduced variability and even cost optimization through GIS, an advanced, informative and integrated system for supply chain management and risk mitigation can be a true game changer for automotive players.