Global demands shape automotive industry's supply chain objectives

Strong focus on cost reduction and service improvement JOY ORLEK THE AUTOMOTIVE industry confirmed its status as the most advanced sector in terms of SA supply chains in the latest supplychainforesight survey undertaken by Barloworld Logistics. “A good indicator of this is that, from having had a fairly DIY attitude to supply chain management in our 2006 study, with almost 50% of respondents considering it better to manage their supply chains themselves rather than outsourcing aspects of the management of it, there is a marked tendency this year to work with supply chain consultants and 4 PL service providers,” the survey states. “The 17% of Automotive SCLMs who use 4 PL companies far exceeds the 4% of the general sample who do the same.” The industry’s objectives for the coming year indicate a strong focus on cost reduction and service improvement, in particular on lowering inbound costs and improving on-time deliveries and decreasing customer lead times. These objectives reflect the competitiveness of the global market as well as the changes in the nature of demand in the market. “The industry is clearly looking to make its supply chain ever more flexible and agile,” the report points out. “The pressures on the automotive industry’s supply chain are different in crucial ways from those in other SA industries right now. “Sustained local economic growth and demand has served to increase complexity and volume, but this sector is also very concerned with the global picture – more so than most other industries. “It is also faced with a delicate balance between servicing customers and dealing with suppliers.” Clearly this will need to improve if it is to address the burning issues of agility, flexibility and customer diversity which the automotive supply chain needs to offer in order to provide advantage in a highly-competitive global market.