At last week’s live webinar hosted by Automotive Logistics – Optimizing supply chain resiliency through integrated planning and execution – supply chain experts gathered to discuss how best to recover from a crisis and what needs to be done to prepare for the next one.

Logistics professionals in the automotive industry are used to dealing with supply chain challenges but the disruption and uncertainty caused by Covid-19 amplified two main concerns: how to generate more cash and how to avoid or mitigate risk. The need to improve cost performance in inventory, network and logistics is matched by need to manage variability, whether it be shipment delay, capacity shortage or excess inventory.

Car making is a capital intensive industry and the automotive supply chain is highly complex, involving the manufacture and movement of highly engineered parts on global supply lines, usually to a schedule of just-in-time delivery. The industry is not good at dealing with sudden stops and starts, which put significant stress on the supply chain and have costly repercussions in a number of areas.

“We spent the majority of 2020 in crisis management mode, dealing with inventory, monitoring accounts payable activity and ensuring stability of supply once we had to start the wheels turning again,” said Kelly Bysouth, chief supply chain officer at International Automotive Components (IAC), a tier one parts maker providing interior components to the majority of the major global carmakers.

Ensuring stability of supply is a particular issue for the automotive industry, especially when supply lines are suddenly disrupted, because finding alternative parts is easier said than done.

“A lot of the parts that we buy in the automotive industry are specific, engineered parts and a lot of those parts require lengthy lead times to tool up,” explained Bysouth.

Identifying alternative sources of supply is one thing. Having the foresight to know when to go ahead with that supply and evaluate the shipping options is another and it is complicated by the fact that there remains no true end-to-end visibility in the automotive supply chain.

“More often than not, tier one suppliers do not have the right level of visibility from an integrated supply chain perspective,” said Bysouth, “[and] the OEMs themselves – big as they are with as many resources as they have – also struggle.”