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Five Key Factors That Are Revolutionizing Automotive Supply Chain Resilience

Five Key Factors That Are Revolutionizing Automotive Supply Chain Resilience

The automotive industry’s response to increasing complexity of supply chains have historically been relatively simple. Lead times were increased, buffers were built into part delivery plans, and stock on hand was increased at critical points in order to ensure vehicles continued to roll out of the plant.

In recent years the trend towards supply chain planning optimization technologies has seen this simple approach modified a little. Planners were left with tools that allowed them to test scenarios against each other and build uncertainties into the models they sought to optimize.

Yet, as Tim Payne, Vice President of Supply Chain Research at Gartner, explains, even leading solutions offer little more than testing a handful of scenarios, all of which were based on a single supply chain plan. He writes that:

“Today’s SCP solutions still only create one plan — a single plan for the supply chain. These scenarios are typically created in an ad hoc fashion when there is a big disruption of some sort on the demand or supply side. Why is this a problem? Supply chain plans typically take little or no account of uncertainty.” 

Luckily, a new generation of technologies have emerged that will empower planners to better account for uncertainties in their automotive supply chains.

A New Era of Supply Chain Resilience

According to the latest research from the Gartner Supply Chain Research team, there are five factors that driving supply chain resilience in the automotive sector.

planning for supply chain resilience

Key Factors Driving Resilient Automotive Supply Chain Planning

Factor #1: Shifting From Deterministic to Resilient Planning

The paradigm shift that we discussed earlier. With these new tools, supply chain planners are able to test thousands of scenarios and optimize their systems in order to be more resilient. With this capacity, then, is it any wonder that we’re talking not just evolution or transformation but a true paradigm shift?

Factor #2: Digital Supply Chain Twins

The second factor is the acceptance and adoption of digital supply chain twins. Already, leading firms like Renault are using digital twins of logistics and supply chains. These digital twins are helping automakers identify points of leverage, boosting supply chain resilience to lift levels of efficiency.

Factor #3: Artificial Intelligence (AI) and Machine Learning (ML) Technologies 

Factories and plants that have transitioned to Industry 4.0 standards and auto manufacturers that have invested in big data and the industrial Internet of Things (IIoT) are using AI and ML to uncover insights about their supply chains and identify avenues for optimization.

Factor #4: Cloud Computing and Hyperscalability 

As Deloitte has explained, cloud computing has been adopted right across the auto supply chain to maximize uptime, optimize logistics, improve supply chain analytics, and unlock trapped value at every point in the value chain between supplier and consumer. 

Factor #5: Multi-Layer CORE Model

The CORE (Configure, Optimize, Respond, Execute) model leads to supply chain resilience as it forces assessments of uncertainty and subsequent re-assessments of supply chain plans. It is a more agile approach and resilience is the focus of the ‘Configure’ and ‘Optimize’ layers, with the ‘Respond’ and ‘Execute’ layers focused on accuracy to ensure that this resilience is achieved.

To learn more about these five factors and how automotive companies can shift to resilient supply chain plan, speak with a supply chain specialist on our team.

Simulation Digital Twins and Supply Chain Resilience within Automotive

Cosmo Tech’s Simulation Digital Twin helps automotive manufacturers build for supply chain resilience. With uncertainty and risk built into the supply chain simulations, Cosmo Tech’s software enables planners to determine optimal execution strategies that are both resilient and robust.

Complementary to AI and ML technology and deployed in the cloud, the Cosmo Tech Simulation Digital Twin allows production planners to simulate thousands of scenarios and determine the impact of any decision.

With Cosmo Tech’s Simulation Digital Twins, automotive manufacturers can align themselves with Gartner’s recommendation to “model and simulate the physical supply chain and align decision making across the supply chain by using a digital supply chain twin.

Already the choice of European automotive industry leaders like Renault, Cosmo Tech is a clear choice for manufacturers seeking to achieve supply chain resilience and find their forward.

Get your complimentary copy of the Gartner research for a limited time. The report will be available through September 1, 2020.