The supply chain in the automotive industry is a very complex system, often made up of many different suppliers all feeding into an assembler to supply a finished product. Therefore it is essential for businesses in this niche to maintain constant tabs on their supply chain management systems.
In recent times, this sector has shown a growth trend, being considered one of the most promising industries to watch out for in terms of technological expansion and increased profitability. However, on the negative side, many automotive suppliers face many challenges. Some of these are proving very hard to handle, especially for the smaller companies within this industry. Therefore, strategic supply chain management must be a top priority for such organisations in order to deal with and avoid future challenges and disruptions. The UK automotive industry sector is currently at its lowest sales performance due to a combination of COVID-19 and Brexit, the reason why automotive manufacturers are continuously seeking ways of improving their efficiency and increasing their savings in various areas.
This article will discuss the main issues of the automotive supply chain and provide practical solutions that can help the industry during these challenging times.
Overstocked inventories
When it comes to stocking and over-stocking, all sectors need to ensure that these aspects are kept in control at all times. Especially due to the automotive industry, the global supply chain has seen steady growth in the past few years. But this doesn’t mean that companies operating in this industry have to undertake extensive production.
At the same time, automotive companies must also ensure that they avoid being understocked or face a supply shortage. The automotive industry’s most challenging task is to estimate the demand correctly and align it with the production capacity to meet the needs.
An excellent solution for this challenge would be to team up with third-party logistics companies to maintain the right balance between the production and supply. This will also help to gain full visibility of the demand, whilst making better decisions when it comes to the production process.
Adaptability to change
An inevitable aspect of any industry that a company operates in is change. In a rapidly growing sector like the automotive industry and its supply chain, there will always be constant changes throughout the year.
With this in mind, companies in this industry must be highly prepared to be flexible during extreme change times. This is to predict high and low demand seasons correctly, whilst adjusting their supply chain accordingly to meet such demand.
Cost and location
In the automotive industry, the manufacturing intensity can increase due to many reasons such as innovation, technology, and consumer demand. To maintain an adaptable supply chain, automotive manufacturers prefer to have local suppliers.
Automotive organisations want their suppliers to be fully available in every jurisdiction where they have an active manufacturing presence, therefore, several actions must be taken. First of all, each business location has to be evaluated in terms of:
- Finances
- Relocations
- Workforce requirements
- Rules and regulations of a new jurisdiction
- Maintaining client production outputs
- Maintaining high quality for the products
- Optimising production lines during the transition
- Closing down one facility whilst setting up a new one
To put it simply, considering cost and location requires effective financial planning, and if this isn’t done correctly, automotive companies can miss out on large amounts of profit.
Just-in-time operations
As massive changes have threatened the automotive industry, car manufacturers are experiencing seismic shifts as driver’s habits are continuously growing, paired with pressures from governments, consumers and stakeholders as well. These changes are driving a new era of automotive innovation which transforms the vehicles themselves, as well the entire engineering processes, facilities and manufacturing solutions.
Firstly, the most commonly encountered automotive supply chain issues are:
- Feeding components to the production line in a timely manner
- Retooling as injection dies are heavy and extremely difficult to move
- Space which is often a premium
- Introduction of flow line production can be very costly
With these in mind, automating the automotive supply chain processes by adopting JIT technologies can significantly reduce costs and other losses too, whilst greatly supporting the automotive industry in all areas.
To put it simply, JIT (just-in-time operations) is a philosophy of manufacturing based on planned elimination of waste and productivity improvements. It covers the execution of all activities required during manufacturing in order to produce successful products. The elements of Just-In-Time are:
- To have only the required inventory when needed
- To achieve zero defects whilst manufacturing products
- To reduce lead times by reducing setup times, lot sizes and queue lengths
- To accomplish all the above at low costs
Ultimately, JIT has a simple goal, and that is to optimize processes and procedures during production by pursuing waste reduction every single step of the way. Also, the idea of JIT is to drastically reduce work in progress inventories throughout the production system, which will greatly reduce, or even avoid any delays or interruptions in the flow of products from suppliers to production to customers beyond the time they spend being manufactured. Amazing benefit, right?
Now let’s get down to more benefits of Just-In-Time manufacturing:
- Set up times are considerably reduced in factories
- Inventory levels are reduced too
- The quality of products is greatly improved
- Scrappage is reduced
- Teamwork is promoted
- No more problems during manufacturing operations and streamlining
- Identifying and eliminating waste at every stage
- Enhanced productivity
How can electric tow tugs help the automotive industry?
To put it simply, electric tow tugs are the safest material handling solution for the automotive industry and they are a great alternative to forklifts as well. If you want to find out more, we have a great blog on the difference between forklifts and electric tow tugs that you can check out!
At MotorMovers, we’ve been safely supplying material handling solutions for a quarter of a century, helping automotive companies to increase their profits whilst developing stronger relationships with their clients. We have several different automotive manual handling products, which are:
- The MotorMover Mini: up to 3,000kg
- The MotorMover Maxi: up to 10,000kg
- The MotorMover Major: up to 20,000kg
- The MotorMover Tow Minor, for pulling loads up to 1,750Kg
- The MotorMover Tow Major, for pulling loads up to 20,000Kg
With the help of our electric tow tugs, the competitive automotive world can benefit from:
- Just In Time (JIT) delivery of materials and components to production lines
- Reduced reliance on forklifts or ride on tugs
- Dramatic reduction in manual handling
- Cost-effective integration into lean manufacturing solutions
- Enabled staged production processes (TAKT)
- Increased efficiency through semi-automating production lines
Additionally, our pedestrian operated industrial tugs will increase your yields, whilst giving you better control over your entire facility. They can safely and efficiently move:
- Injection moulding dies
- Tooling dies
- Picking Trolleys
- Vehicle Chassis
- Engine Trollies
- Bodies
- Axles
Additionally, you can also read our blog to find out the biggest food and beverage supply chain challenges and how electric tow tugs can help this industry overcome them.
In conclusion, Just-In-Time Manufacturing can positively influence companies within the automotive industry. However, automotive manufacturers must take into consideration that this type of manufacturing system takes long-term commitment, and it can be a complicated technique at times. But once implemented correctly, it will eliminate waste whilst greatly increasing productivity and efficiency due to shorter transportation and better communication between employees and teams. At MotorMovers, we believe that by taking the appropriate actions and steps, automotive companies will be able to smoothly transition towards implementing efficient JIT systems.
If you have any questions or are interested in how MotorMover can help you achieve this transition, please do not hesitate to get in touch with us, and one of our friendly team members will get back to you as soon as possible with the advice you need!
