Accelerating out of a Spin: Mark Morley Describes How the Automotive Industry is Pushing the Supply Chain Pedals (Automotive) (Company Overview‪)‬

The automotive industry in Europe has experienced a turbulent period of change during the past couple of years. Buffeted more than most sectors by the worldwide economic downturn, the industry has been transformed out of all recognition by a series of seismic shocks. As the dust begins to settle, the new landscape is inspiring many manufacturers and suppliers to rethink their business strategies and look for new ways to streamline supply chains, become more active and agile businesses and, in the process, reduce costs. These ambitious goals pose a series of tough questions for supply chain professionals in Europe, grappling with the issues and looking for solutions that combine innovation with exceptional reliability. So what are the main challenges and the different ways in which leading companies are choosing to respond? One major trend has quickened its pace--the continuing thrust to globalize operations. For automotive companies, this means new manufacturing hubs appearing in a number of regions around the world. VW and Ford, for example, have recently confirmed significant multi-billion dollar investments in manufacturing facilities in Brazil. The locations are not just the now familiar BRIC countries (Brazil, Russia, India and China) but new locations such as Thailand and Vietnam. A good example is provided by Germany-based Continental, one of the five largest automotive suppliers in the world and the second largest in Europe, employing approximately 134,000 people at nearly 190 locations in 37 countries. A fundamental part of Continental's business strategy is to research and track worldwide markets for new potential partners who can provide fresh innovation. As a result, Continental now has more than 5000 partners around the globe, including China, Korea and Malaysia. Josef Radlbeck, head of the EDI in Germany for Continental's automotive division, explains: "Working effectively in different regions of the world is vital, not just as part of an overall effort to drive down costs, but on a strategic level to tap into innovative thinking to help us deliver trendsetting innovation and high performance products. Providing an effective way to trade electronically with partners, wherever they are based and whatever their specific local requirements, is a business-critical step." Supply chain directors have no choice but to address the increasing requirement to provide connectivity to global manufacturing hubs and trading partners in emerging markets. Flexibility is a key must-have, as Josef Radlbeck comments: "Different regions of the world can sometimes present different challenges related, for example, to cost-sensitivity or lack of technical experience."