Current situation and future of supply chain and i

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The current situation and future of the supply chain and it system in the automotive industry

through modular design, vehicle manufacturers no longer need to transport thousands of parts to their own factories for assembly. In a sense, modularization transfers part of the assembly workshop of the vehicle factory to the parts suppliers

future trend of automotive supply chain development

in the past 30 years, the profitability of the global automotive industry has gradually declined, and emerging markets represented by China and Latin America have become the target of excess production capacity. When these multinational enterprises enter China, they also bring their overseas suppliers

at the same time, the regional distribution of multinational companies' production and sales activities has promoted the exertion of the comparative advantages of various countries and further driven the globalization process of the automotive industry. On the other hand, the competition mode of multinational automobile companies has also changed from the past refined management (such as lean production mode) to the integration and reconfiguration of industrial chain and value chain, and its operation must take the supply chain as the carrier

challenges faced by parts suppliers

as vehicle manufacturers restructure their manufacturing supply chain according to the principle of value chain, and spin off and outsource a large number of non core businesses, more and more parts manufacturing and assembly are pushed to independent first tier suppliers, and the requirements for all suppliers in terms of service and response time are raised, forcing suppliers to do:

1 Be able to quickly respond to the demand forecast and production plan changes from the vehicle factory

2. Invest in process and technology improvements to ensure the accuracy of information transmission in its downstream supply chain

in most cases, these efforts of suppliers must be coordinated and coordinated by the vehicle manufacturer in process and technology to succeed

in order to reduce the purchase price, the vehicle manufacturer has not only added the requirements and terms of annual cost reduction in the contract with suppliers, but also has been constantly committed to pursuing the globalization of production and procurement and the transformation of the traditional supply system. In addition, automobile manufacturers, as purchasers, began to pay more attention to the acquisition cost of parts in the whole life cycle (including the cost of logistics, claims, after-sales and other links), not just the price of parts when they leave the factory

for parts suppliers, it is necessary to provide rapid and flexible response for the vehicle factory and continuously reduce costs. Since the traditional parts inventory in the vehicle factory has been moved from the factory to the supplier, successful parts suppliers need to provide the vehicle factory with the same convenience as the previous in plant inventory supply, and also need to be able to avoid the high cost of inventory supply. It is unimaginable without the support of IT system

vehicle factory strategy

as a response to the general market trend, the vehicle factory has formulated a series of coping strategies. It can be found that these strategies seem to be similar among major automobile enterprises

globalization strategy

until the late 1980s, the competition between vehicle manufacturers was mainly the competition of regional brands. American enterprises dominate the American market, Japanese enterprises dominate the Asian market, and European enterprises also occupy their traditional territory. However, by the 1990s, the situation had completely changed. The increase in the number of overseas transplant plants has brought competition in every corner of the world, and new models are more synchronized in all locations around the world. With the investment in new assembly plants, vehicle manufacturers also try to copy the original supply chain and require their suppliers to invest in new markets (even next to factories)

modular strategy

the second important strategy adopted by vehicle manufacturers is modular design. Through modular design, the whole vehicle factory does not need to transport thousands of parts to its own factory for assembly, but divides the whole vehicle into dozens of large modules, and the assembly of each module is completed by the supplier. In a sense, modularization transfers the assembly workshop of the vehicle factory to the parts suppliers. Through modularization, the vehicle factory saves the investment in the final assembly workshop, greatly reduces the number of suppliers, and makes it easier to supply goods in time. For example, when Daimler Chrysler launched its M-class sports car in the United States, it adopted a large number of modular designs, which reduced the total number of suppliers directly supplying M-class cars to 65, while according to the traditional practice, the number of suppliers should be hundreds

by realizing modular production, the role of vehicle manufacturers and parts suppliers will change significantly. Vehicle manufacturers will pay more attention to their core competitiveness and strip off some non core businesses. The most typical example is that General Motors spun off Delphi in 1999 and Ford spun off Visteon. Such divestitures seem to have become more frequent in recent years. Under the modular production mode, the focus of automotive technology innovation is on parts, which requires module suppliers to have the design and manufacturing of system modules and strong logistics coordination and management capabilities. Therefore, those diversified parts suppliers will take advantage. In the above Daimler Chrysler case, some world-class parts suppliers in the United States, such as Delphi and Johnson Controls, played an important role. Delphi's Parker electric division is responsible for providing cockpit modules, assembling more than 150 parts from 35 other suppliers into cockpit module assemblies, and delivering them to the automobile assembly line in a timely manner with good light and heat reflection performance

outsourcing strategy

obviously, the position of suppliers in the strategy of vehicle manufacturers is changing. When explaining the relationship between vehicle manufacturers and suppliers, there are two models:

1 Selection model: select suppliers according to the requirements of final customers for price, quality, etc

2. Development model: pass on the final customer's requirements for price and quality to suppliers, and actively cooperate with suppliers to realize them

at present, it is difficult to say which of these two models will become the mainstream. However, it is obvious that as vehicle manufacturers shift more attention to dealers, end customers and after-sales service, suppliers are also feeling increasing pressure

vehicle manufacturers recognize that the key issue in outsourcing is development costs. As the manufacturing cost base of modules and systems is also relatively weak, most of them have been transferred to suppliers. If suppliers can also undertake all development and engineering work, this outsourcing project will be more profitable for vehicle manufacturers. Especially for some complex systems or modules, suppliers can share the development cost among the products supplied by several vehicle manufacturers, so suppliers with development ability will be particularly competitive in the market

after recognizing the importance of outsourcing the system to suppliers, the strategic goal of the vehicle factory has changed to cooperate with a few large suppliers with outsourcing ability. Although this is the overall trend of the industry, different vehicle manufacturers still have different attitudes towards it. Renault and Volkswagen have relatively conservative policies, while Ford is very radical

the supply value of Volkswagen and Renault is much lower, and the business strategy can be summarized as "2 + 1", that is:

1 For each major module, the vehicle factory establishes partnership with major suppliers

2. In each regional market, priority will be given to two suppliers to get involved early in the development process. The third company followed closely, undertaking slightly less, but also ensuring that it is sufficient to replace the current suppliers

3. As the same model of cars will be sold in several regional markets at the same time in the global market, the same supplier will supply the same model globally. As vehicle manufacturers have the same requirements for parts in all assembly plants around the world, suppliers must face two choices: either build factories close to the assembly plant or authorize local suppliers to produce. The result is often the first

Ford implements the single supplier principle. Volkswagen and Renault do not agree with this practice and think it is too radical. Ford's practices include:

1 Clearly promote and increase the supply of large modules, and reduce the supply of single parts and even assemblies

2. Theoretically, the ultimate goal is to realize modular supply by one supplier

3. The final assembly plant encourages suppliers to own tooling and molds, which is another way to push the risk of output fluctuation to suppliers

this policy will undoubtedly lead to a significant reduction in the number of Ford suppliers and the reduction of many current tier 1 suppliers to Tier 2 or Tier 3 suppliers. Ford acknowledges that its supply strategy is not flawless. In fact, with the increasing proportion of outsourcing and always turning to a few large system integrators (such as Lear and magna), Ford may eventually lose a lot of influence in the supply chain and knowledge of the supplier industry

in fact, the whole vehicle factory has not only added to the supplier in the field of development and manufacturing, but also tried some bolder practices in the assembly stage. In Brazil, Volkswagen and General Motors try to let suppliers assemble in the final assembly plant and directly onto the car. The advantage of this approach for vehicle manufacturers is to reduce the investment in fixed assets and reduce the cost of supply chain management

while giving more to suppliers, the vehicle manufacturer also imposes more restrictions on suppliers. First, the vehicle manufacturer requires the supplier to continuously improve the product quality and performance. This means that suppliers need to reduce the rework rate, scrap rate and return rate by 5 ~ 7 percentage points every year. Secondly, in the contract, all vehicle manufacturers will set a price reduction clause for suppliers year by year, linking the length of time and total amount of contract execution with the price reduction range promised by suppliers

supply chain management in the automotive industry for mass customization

mass customization is a modern production mode developed from mass production to meet the diversified needs of users. This method requires vehicle manufacturers and upstream and downstream partners to maintain a high degree of synchronization. It can be found that mass customization in the automotive industry has extended the value chain involved in traditional production, from the original "manufacturing order" to "development order"

the information system model of automobile industry under mass customization is composed of collaborative design platform of products and processes, collaborative planning and response platform of supply chain and distributed collaborative after-sales service platform

collaborative design platform of products and processes

creating customizable products is the starting point of mass customization. In order to realize the transformation from traditional production to mass customization, we must pay attention to and realize the following requirements:

1 Enable users to become the central part of the development and delivery process of new models, that is, in the early stage of the automobile development life cycle, give users the ability to interact and influence product design

2. Let suppliers participate in the development and delivery of vehicle models earlier and more actively, share the development costs, and prepare for supporting supply in advance

3. Create a collaborative, visual and integrated cross enterprise design platform, and all design participants can visually manage design features and functions in an intuitive way

at present, vehicle manufacturers tend to use collaborative product business CPC technology centered on PDM, and connect

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