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4 Ways to Improve Supply Chain and Procurement in the Automotive Industry

Dec 12, 2018

Today, the automotive industry is one of the most rapidly growing industries globally. Furthermore, being the most innovative sector, a fierce competition is at the core of the automotive industry. In fact, it would not be wrong to say that the success of both the manufacturers and the suppliers in the automotive industry is completely dependent on their collaborative behavior against the need of the customer. One of the most common issues currently impacting the automotive industry supply base is keeping up with the growing volumes, which has resulted in shortages in supply. Aiming at the outcomes, a competitive supply chain capability not only assures the delivery of component material on-time but also the execution of inbound supply to guarantee the shipment of quality finished goods at a competitive price. Therefore, improving procurement and supply chain process in the automotive industry is a significant challenge as well as an opportunity today. So, in this article, we have discussed a few very important ways to boost the supply chain and procurement which in turn can result in improved cost savings as well as better customer experiences in the automotive sector.

Tips to boost supply chain in the automotive industry

#1. Turn focus from price to quality

Manufacturers in the automotive industry have realized that price cannot be the only factor to crequest proposalonsider while looking for suppliers. Today the customers are preferring better quality over lesser price. So, opting for the cheaper option can have undesirable results for the suppliers in the automotive industry.

#2. Develop better relationships with suppliers

For the supply chain and procurement process to improve, it is very important to establish better relationships with the suppliers.  Auto manufacturers often deal with multiple suppliers for similar products. This results in issues and inconsistencies, something that can be eliminated by cooperating with suppliers and concentrating on the single-supplier structures for most of the components.

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#3. Use advanced technology

Today supply chain management has become easier using technology. The supplier management software can help the automotive industry to streamline the whole process of procurement. There are different benefits of using technology like improved supplier performance and information management, greater supplier intelligence, and better relationship management.

#4. Understand potential risk in the supply chain

To make the supply chain and procurement process efficient in the automotive industry, it is very essential to understand the potential risks involved. Although it is not possible to identify and mitigate every potential risk,  it is better to be armed with data and have a process in place to address the most significant and likely risk elements.


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