5 Key Insights From the 2022 Automotive Logistics and Supply Chain Conference
I just returned from the Automotive Logistics and Supply Chain Conference in Detroit. This annual event explores supply chain management and how logistics can succeed in a fast-changing environment. I am feeling energized by what I learned and the people I spoke to while there. You can check out a list of the 30-plus speakers and 18-plus sessions here.
In case you were not able to be there, I’ve compiled a list of five key takeaways from the various presentations I was able to attend:
- Enabling Supply Chain Resiliency by Bringing 3PL/4PL In-house – Congestion across network, labor shortages, transportation delays, capacity constraints, port bottlenecks, and cost pressures highlight the need for automakers to strive for greater supply chain resiliency. Strategic relationships, improved collaboration with logistics providers, and the possibility of bringing 3PL/4PL in-house to reduce transportation and warehouse costs and gain more control over logistics operations are all strategies to enable supply chain resiliency.
- Illuminating the Network – The magnitude and frequency of disruptions are increasing. Whether it’s COVID-19, chip shortages, or the Ukrainian conflict, this is the new normal. The automotive industry is a complex ecosystem comprised of dealers, original equipment manufacturers (OEMs), multiple tiers of suppliers, and third-party logistics providers (3PLs). Any disruption in one node, including a Tier 2 or Tier 3 semiconductor wafer provider, can send repercussions throughout the network. As a result, having complete visibility and « illuminating the network » across the entire ecosystem of Tier 1, 2, and 3 suppliers, OEMs, logistics service providers, and even dealers is critical. Sensing and predicting disruptions as early as possible will allow organizations to develop proactive risk mitigation strategies and lower premium freight. Furthermore, having short-term Purchase Order/ASN-level visibility is insufficient. OEMs and Tier 1 suppliers should consider longer-term forecasting and capacity collaboration with their Tier-n suppliers.
- Breaking Down Silos Between Procurement, Planning and Logistics – Siloed supply chains can result in latency, lack of responsiveness, expediting, excess inventory, and dramatic inefficiencies, which are exacerbated today by rising customer expectations and increased volatility. In the face of such uncertainty, complexity and volatility, automakers should create a variety of « what-if » simulations and contingency plans based on demand realization and supply disruption scenarios.
- Countering Inflation – With inflation at a 40-year high, auto suppliers are feeling the pinch as a result of rising material costs, supply chain disruptions, and rising transportation costs on the one hand, and changes in auto OEM demand mix on the other. This has a substantial impact on their EBITDA margins. To combat inflation, CSCO are launching supply chain improvement initiatives such as inventory reduction, improved operational efficiency, cost control, working capital reduction, and cash flow preservation.
- Developing Supply Chain Talent – As the supply chain becomes more complex, job roles and skill requirements evolve, and the automotive industry faces fierce competition to attract and retain top talent. Job satisfaction can be increased by having planners perform more value-added activities such as supplier/customer collaboration and what-if scenarios rather than simply being « excel jockeys. » Creating an inclusive and diverse workforce is critical to driving supply chain performance, fostering creative and productive work environments, and addressing labor shortages across the value chain, from truck drivers to the boardroom.
In addition to these takeaways, it was great to meet and learn from key industry leaders including: Kelly Bysouth (Chief Supply Chain Officer, IAC Group), Steve Brown (Vice President, Toyota Parts Supply Chain), Chris Styles (Vice President, Nissan Supply Chain Management), Bridget Grewal (MAGNA), Greg Megerian (Director of Logistics, Adient), and Edgard Pezzo (Executive Director, Global Logistics and Containers, GM). One of my favorite panel discussions was “Maximizing Potential – Women and Diversity in the Automotive Supply Chain” with Kelly Bysouth (Chief Supply Chain Officer at IAC Group), Kathy Crawley (General Manager, Transportation at Amazon), Mauryo Jones (VP Safety Health & Security at Ryder), and Jennifer Sarah Bolton (Director, Supply Chain Management at Nissan North America).
I look forward to seeing you at next year’s conference! In the interim, learn how Blue Yonder has helped automotive companies like Adient, Yazaki, Cummins Meritor, Mahindra, Mercedes Benz USA, Renault, Ford, Bridgestone, Michelin, etc., on their supply chain transformation journey by reducing premium freight, improving operational efficiency, increasing throughput, reducing working capital and improving planner productivity.
Salim Shaikh (CPIM, CSCP) is a Digital Transformation Executive at Blue Yonder. He is a widely-recognized, trusted advisor helping customers implement best practice strategies and processes to drive significant business value and financial benefits.