It’s important to keep up with trends in the automotive supply chain so that you can practice effective supply chain management. However, it is difficult to identify these trends on your own. Thankfully, RPM is here to help you stay ahead of the curve in the automotive supply chain with the best insights and service.
What Is Supply Chain Management?
Supply chain management is the management of the flow of auto parts and services all the way from raw materials to final products that are then shipped to customers. This flow typically involves several different parties, including individuals, companies, resources, activities, and technologies.
Essentially, if something is involved in producing a product — then it’s part of the automotive industry and needs to be properly managed to ensure a smooth process from start to finish and to avoid supply chaindisruptions.
Why Is Auto Industry Supply Chain Management Important?
Automotive market supply chain management is important as it ensures that the production and fulfillment processes are completed in a time-efficient and cost-efficient manner. Quality auto parts issues and other delays are costly for companies — both in terms of actual revenue as well as public standing.
As a result, it’s important to carefully manage countless working parts at the same time so that all these processes come together and provide a quality product. Good supply chain management ensures that customers are satisfied and that you and automakers stay out of the headlines for poor products, service, and fulfillment.
How Does Supply Chain Management Work?
Supply chain management works by combining five different components: planning, sourcing, manufacturing, delivery and logistics, and returning.
Here’s what you need to know about each of these essential components:
1. Planning
Planning involves obtaining enough resources to meet consumer demand for a product, service, or for automotive parts. It’s important to closely monitor both supply and demand for each component of a product so that you can plan ahead. Also, be prepared with a contingency plan should unexpected changes come up.
2. Sourcing
Sourcing involves choosing suppliers that provide the products and services needed to develop the final product. The suppliers chosen must meet the demand for these items.
You will then need to develop a strong working relationship with your chosen suppliers to ensure that your order’s fulfillment is on track.
3. Manufacturing
Manufacturing involves actually transforming the raw materials provided by suppliers into the final product that consumers demand. In addition to assembly, testing and packaging occur during this stage in the process.
For automotive manufacturers, It’s important to test products to ensure that they are in good working order and are of good quality. It’s also important to properly package products to keep them safe and undamaged during the shipping process.
4. Delivery and Logistics
Delivery involves providing the final products to customers. However, delivery is more involved than meets the eye. You must coordinate customer orders from vehicle manufacturers, schedule deliveries, and dispatch loads at this point in the process.
This is where logistics comes into play so that you and the automotive companies meet customer needs with a limited amount of time and resources.
5. Returning
Returning involves managing the process of taking back damaged, defective, or otherwise unwanted products from customers. There should be a network and a process in place for returns. In addition, there must be a network and process in place for returns to the supplier should you receive parts or components that are low quality, defective, or expired.
How a Transport Broker Helps
A transport broker helps in several different parts of the supply chain. For starters, they help with sourcing when you need to get parts and components from suppliers to your plant for manufacturing.
Transport brokers also help automotive suppliers with delivery and logistics. Using a reputable and experienced transport broker ensures that your products arrive at consumers in a timely manner to improve customer satisfaction.
Finally, transport brokers are involved in the returns process when a customer decides they want to ship back a product due to certain issues. These returned products need to be transported back to you in a timely manner to process the return and refund for the customer.
While a transport broker makes supply chain management easy and painless, this is only true with the right broker.
Make sure to check reviews, credentials, and track records before working with a broker. Client reviews should be overwhelmingly positive, the right parties should accredit them, and they should have a good track record of on-time and safe deliveries.
Current Trends in the Automotive Supply Chain
The automotive supply chain changes constantly, and it can be hard to keep up with trends. As you now know, prediction and planning are key to effective supply chain management. So here’s what you need to know about some of the biggest trends in the automotive supply chain right now:
Trend 1: Automated Handling
Just as vehicles themselves are becoming automated, the handling systems involved in the supply chain are increasingly becoming automated themselves. Narrow aisle trucks, reach trucks, and low-level order pickers will be commonplace in extracting and putting away pallets.
The truck may be automated through systems like induction loops, camera systems, lasers, GPS, or a combination of these systems.
Trend 2: Different Power Options
Power is changing, and it’s affecting the automotive supply chain. Fuel cells are a particularly promising trend that is definitely commercially viable. Not only that, but it can also help save money!
Furthermore, fuel cells can also save time since they can be refueled in a matter of minutes. As a result, this might be a viable power alternative for high-throughput, multi-shift operations that are running 15 or more lift trucks.
Trend 3: Local Support
While having a global network is important, so is having local support. This is becoming even more important as businesses are trying to improve their shipping and fulfillment timelines to compete with corporate giants that can offer free two-day shipping. So expect to see more of a focus on local support networks that can support nationwide or even global operations.
Trend 4: Connectivity
The world is more connected than ever — this is also true when it comes to the automotive supply chain. Manufacturers are increasingly using smart technology to improve the efficiency and productivity of manufacturing operations. This technology can also be transferred to trucks so that manufacturers can accurately monitor fleets and shipments for potential delays and other issues.
Trend 5: Customization
The last trend in the automotive supply chain is customization. Businesses are now looking for materials handling suppliers for equipment that meets their specific needs. As a result, you should be willing to offer custom options to meet clients’ unique needs.
How Your Transport Brokerage Can Take Advantage of These Trends
Your transport broker needs to be ahead of the curve to take advantage of these trends. For example, in terms of local support, look for a transport broker with an extensive carrier network. RPM leverages an extensive network of 30,000+ monitored and vetted carriers that are able to help you meet both local and national needs. In terms of connectivity, your transport broker should offer shipping services with GPS capabilities. This feature allows you to track your shipment while giving you the peace of mind that it’s on time.
Also, look for a transport broker that’s easy to connect with. For instance, RPM provides you with a single point of contact that you can reach out to about your shipment. Finally, in terms of customization, your transport broker should offer a wide range of different services to meet your changing needs. RPM offers custom-tailored experiences for industries ranging from automotive inbound to manufacturing and machinery to steel and industrial materials.
We offer LTL, FTL, expedition, consolidation, intermodal, cross-border, and drayage shipping options. Our modes of transportation include dry van, flatbed, temperature-controlled, bulk, dumb, specialized, and hopper vehicles.
A Key Driver Of Change In The Automotive Supply Chain and the Effects It Has
A key driver of change in the automotive supply chain is standardization. Standardization involves using the same components and assemblies across one or multiple different platforms. As a result, companies are able to increase the volume of products they’re providing while also cutting down on costs since they’re all the same.
Furthermore, standardization also improves the actual quality of the products being made. This is because this process eliminates variation that can affect quality control. At the end of the day, companies are able to waste less, produce more, and satisfy more customers with their products.
What Motivates Buyers?
To truly understand the automotive supply chain, you first need to understand the buyer. No matter what industry, product, service, etc. — buyers are looking for service, speed, and quality. Not only should you look to provide this, but you need to look for transport brokers to partner with that also provide these qualities and benefits.
RPM meets these standards and more with impeccable service tailored to your needs. We boast a 98% on-time delivery rate — so you can rest assured that your shipment arrives in a timely manner.
Conclusion
A dependable and reputable transport broker helps you keep up with all the latest trends in the automotive supply chain. If you’re looking for dependability and reputation — look no further than RPM.
We complete more than 15,000 shipments a month thanks to our network of 30,000 carriers. Reach out today to see how we can help meet your transportation needs.
Sources:
Supply Chain Management (SCM) Definition | Investopedia
What Is Supply Chain Management? | IBM
Nine Automotive Supply Chain Trends to Watch This Year | Supply Chain Digital