Automotive supply chains under pressure – are shortages easing?
As automotive supply chains come under increasing pressure, we get a supply chain expert’s perspective from Rand TechnologyJennifer Strand.
What do you think are the main supply chain challenges facing the automotive industry globally?
With the current demand for the innovative technology currently touted by the automotive industry and the expected accelerated adoption of electric vehicles accelerating the need for automotive-grade semiconductors, there is additional pressure on the supply chain to support the construction of the IT infrastructure from next-generation products and services that will propel the economic engines of tomorrow. All the countries of the world are in this technological race. Automakers are looking to future proofing projects in preparation for this upcoming market. We predict that 2024 and 2025 will be the explosion of electric vehicles.
Do you see the global semiconductor shortage easing significantly this year or will it still be a problem in 2023?
With the possibility of a recession looming, we are seeing a slowdown in some lifestyle product sectors. As a result, we see an indication of potential easing. However, investment continues in the fundamental drivers – Hyperscale/Cloud, Network/5G, EV, Power and Enterprise, which continue to underscore the importance of adopting new approaches to risk mitigation and insurance. ‘supply. It’s an exciting time, where we’re defining what the new normal will be for the supply chain over the next few years. We can expect to see continued disengagements and restraints among chipmakers.
How will the predicted increase in electric vehicles over the decade change automotive supply chains?
If we’ve learned anything in the past two years, we know there’s always going to be something impactful on the horizon – from closures to logistical and production issues. Supply assurance and risk mitigation are the priority of all supply chain initiatives.
We know it will take time to expand the global footprint of fabs and semiconductor production facilities. Moreover, many questions remain unanswered. For example, what is the right mix of technologies at the fab level? What is the real production needed to meet the ever-changing demand? With each revision of a technological device, it seems to double or triple the amount of semiconductors needed. While in the short term, they will have to think about the best strategies in order to manage it effectively.
Do you think automakers will seek to increase their level of vertical integration as they seek to gain more control over their supply chains, particularly bearing in mind emerging concerns over the supply of critical raw materials for things like batteries?
The concerns of car manufacturers are numerous and the geopolitical atmosphere tops the list. There is also a raw material issue which will continue to have an impact in 2023.
When it comes to supply assurance, it’s important to recognize that the desire for just-in-time manufacturing may no longer be an exemplary strategy and could lead to supply delays. Automotive OEMs should consider moving to a longer-term assessment of inventory needs for current and future production. Risk mitigation begins with NPI processes. Designing for flexibility from the start will go a long way to reducing supply chain risk.
What tools can companies use to improve transparency and truly understand where supply chain strains or disruptions may pose a future risk?
OEMs should engage with solution partners who offer sophisticated data and analytics to track trends within the supply chain. However, there is more to protecting your supply chain.
On risk mitigation – what actions can companies take and what do you think will be the most prevalent actions (e.g. warehousing of critical parts, more dual and multiple sourcing)?
Companies are taking a more modern approach to how they plan to use their suppliers. It is essential to have an agile partner with the experience and ability to participate in the complete circular ecosystem of their product. Especially in today’s market, the customer needs a solution partner that understands all products, manufactures and industries.
Jennifer Strawn joined Rand Technology in 2020 and brings a quarter century of experience in supply chain solutions. In partnership with the company’s extensive client base, she leads the conceptualization and implementation of customized, innovative and comprehensive solutions that maximize clients’ market opportunities and improve their respective financial results.
Throughout her career, Jennifer has held senior supply chain positions with several large global companies, most recently with a leading North American-based electronics manufacturer and distributor. She is adept at collaborating with cross-functional teams to scale and grow global organizations and building highly effective sales teams in Europe and North America.