The era of fixed production schedules and
predictable supply chains is "well and truly gone". That was the reality behind discussions at the recent ALSC Global conference, where
leaders from OEMs, suppliers, and logistics providers got together to analyse
the industry's complex new normal.
The automotive inbound supply chain is
navigating, what Ian Slaven, vice-president of global sales and vertical lead
of automotive at Kuehne+Nagel called a "poly crisis" of geopolitical
shifts, technological disruption and volatile demand, all while executing a massive
transition to EVs.
Across the discussions, a clear consensus
came out - the path forward lies not in resisting unpredictability, but in
embracing it. Success now depends on deeper collaboration, advanced technology,
and a fundamental shift from optimising for pure efficiency to building robust,
resilient networks designed to withstand constant change.
Embracing the ‘slushy’ reality
The core of this new reality starts at the
source - the OEM production schedule. Nikki Logsdon, director of demand and supply
planning and propulsion and vehicle scheduling at GM set the tone by confirming
a major operational shift away from certainty.
"We used to have frozen windows,"
she noted. "We are calling them slushy. No more frozen.”
This "slushy" world demands a new
set of principles, as outlined by Dr Ulrich Wieland, vice-president of production
control and logistics at BMW Manufacturing Co. He detailed seven foundational
principles for building resilience, beginning not with logistics, but with the
product itself: designing flexible platforms that can adapt to market swings
between EVs and ICE vehicles.
Other principles include strong localisation, scenario planning in the early design phase, and a relentless focus on
operational excellence to eliminate waste.
"To really take the different scenarios
and extreme scenarios seriously, and to consider them early on and based on
these extreme cases, to then decide on which is the most robust solution,
that's the real challenge," Dr Wieland stated.
This strategic change requires a new balance
between competing priorities. For years, the industry focus was efficiency
above all else.
"It doesn't work as well now as it did
then, and now it has to be a mix of efficiency and resiliency," stated
Slaven. "Resilience takes planning, it takes money, and it takes
will".
That "will" means moving beyond a
"quarter to quarter kind of march" to make longer-term strategic
decisions.
To address this, GM is implementing range
forecasting instead of single data points. "Instead of saying next year
it's going to be 10,000 [units], we might say it's going to be between 9,000
and 11,000 because we're going to be 80% right. But just that flexibility alone
allows us to capacitise to the higher number but then operationalise to a lower
number."
Technology as the enabler, data as the compass
To navigate this constant state of unpredictability,
companies are deploying sophisticated tools to distinguish true signals from
background noise. Ryan Bertul, vice-president of automotive supply chain and
strategic sourcing at Flex, described how his company uses a system called
Pulse, a data collector that creates a real-time dashboard of the entire supply
chain.
This allows Flex to simulate the impact of new
tariffs or, for example, instantly identify which suppliers and parts could be
affected by a typhoon in Asia.
"It's really tough to predict some of
those challenges and disruptions, but when they do come about, just having the
right systems in place to try to help you triage those areas," Bertul
explained.
This data-driven approach is allowing the
industry to become more proactive. Ben Steffes, vice-president of solutions and
strategy, managed transportation at RXO, noted that access to aggregated data
has enabled shippers to use the current freight recession to introspectively
analyse their supply chains and build better strategies.
"There's an expectation that we are
coming to them with proactive solutions," Steffes said, highlighting a
shift where 3PLs are expected to be consultative partners, not just execution
agents.
Patrick Bauer, vice-president of supply chain at
IAC Group, detailed how his team’s analytical tools create a "customer
demand waterfall" to predict what OEMs will actually build versus what
their releases state. This allows them to cascade more accurate requirements to
their own supply base.
The goal now is to expand this visibility
externally by partnering with brokers and other providers to "share
information, share data, so that we can provide a full picture of what's going
on".
Beat Simon, COO of logistics at DP World discussed
its implementation of digital twins and AI across hundreds of contract logistics
sites, while noting practical realities about humanoid robots: "I thought
they don't have any coffee break. But unfortunately, after two hours the
battery is flat, so they also have the coffee break."
Slaven described Kuehne+Nagel's digital twin
capabilities for scenario planning: "We do have a digital twin that we've
been able to stand up, that goes over the top of our entire global network and
pulls in everything that we're doing on a daily basis so that we are able to
put in different scenarios."
Collaboration and trust: The new foundation of
operations
A recurring theme across all sessions was the
critical importance of collaboration and transparent communication as a core requirement.
Ron Glowinsky, vice-president of global sales
at CNW emphasised the fundamental nature of trust: "If there is no trust,
there is no business. It's all about relationships but also providing the
service. So, if the customers do not trust you, you're out of business. That's
why we say failure is not an option."
On the operational side, Glowinsky highlighted
communication as the primary factor in supply chain failures: "Communication…is
the most essential part. And if you check, 95% of the mistakes or failures are
coming from miscommunication."
Additionally, DP World’s Simon emphasised that
collaboration must extend beyond transactional relationships. He said that "the
tenor there is actually going from a transactional relationship to a more
partnership [type of] approach. You're not going to be competitive as an OEM if
you do not have an agile supply chain".
Dr Wieland shared a concrete example of when
communication breaks down: "A couple of weeks ago we were in a situation
at a sequence supplier. He had an inventory loss for a tiny 3 cent part which
he sources from China. And they realised the inventory loss on a Saturday and
unfortunately, they did not grab the phone. And this made us then shut down one
assembly hall for entire shift."
He shared a powerful insight into handling a
crisis like a production line stoppage. The immediate reaction must not be to
assign blame. "The first reaction must be, how can we help?" he
advised.
"And then afterwards, of course, you do a
thorough question on how it could happen. It's really about how you react in
crisis situations, and that you don't unnecessarily increase pressure".
Mitigating new risks: From tariffs to supplier
viability
While the industry has become accustomed to
challenges, the nature of risk continues to evolve. Beyond geopolitical events,
the sheer volatility of demand is a primary concern.
"The thing that really keeps me up at
night is the demand cycles that we're seeing right now where the forecast
variability is like something I haven't seen in many years," admitted
Bertul, pointing to unpredictable mix shifts between EV, ICE and hybrid models.
Supplier viability has also emerged as a
critical risk. Tony Stinsa, head of inbound and outbound logistics at
International, explained that while the post-COVID era of capacity-constrained
suppliers has passed, a new problem has arisen.
"This morning, we had a major supplier
announce bankruptcy and it's going to affect the whole industry," Stinsa
revealed. "It's still about chasing a part, but it's for a whole different
reason".
In response, companies are adapting their
procurement and network strategies. Greg Megerian, global director of logistics
procurement at Harman International, noted that tariff pressures are making
otherwise change-resistant parts of the business more open to new cost-saving
ideas. Dr Wieland addressed the cost-resilience balance directly: "There
are some cases and some situations where this is a contradiction. And there are
other elements which particularly lay in the way you design the process itself,
which are not a contradiction, but where you have a synergy."
He cited BMW's five-day order flexibility
window as an example which allows changes to vehicle orders up to five days
before production begins. This capability proved critical during the
semiconductor crisis and ultimately enabled a highly efficient system with low
inventory levels, strong flexibility and high operational efficiency.
Building the supply chain of tomorrow
Looking ahead, industry leaders emphasised the
need for sustained focus on flexibility and collaboration. Stinsa highlighted
the importance of protecting strategic work from daily chaos: "I have to
budget time for future-looking strategic priorities, the cost reduction
projects and the things that are not just about daily change."
The consensus across sessions was clear: while
uncertainty has become permanent, the industry is developing more sophisticated
tools, closer partnerships, and more flexible processes to navigate it.
Success requires moving beyond reactive
firefighting to proactive scenario planning, backed by real-time data systems
and trust-based relationships across the entire supply chain ecosystem.
As Logsdon concluded about GM's transformation
efforts: "We know that supply chain is going to have such a major
transformation the next three to five years... we're excited about what the
future looks like."
"It'll be exciting to get some integrated
tools that will allow us to be able to react quickly and make really better
business decisions and give our leadership options," Logsdon added.
