Automotive sector

Supply chain ‘fragility’: how the automotive sector may have to adapt to global uncertainty

That the automotive industry has been hit by the Covid pandemic and the ripple effect of a global shortage of semiconductor chips is old news, but its effects are still being felt. Given the complexity of the global automotive supply chain, it’s perhaps no wonder the sector has been hit so hard.

The automotive procurement process is notoriously fragile. Aside from the impact of the pandemic, environmental, geopolitical, and economic pressures have all contributed to adding additional pressure on supply chains.

However, the sector has shown over the past decades how resilient it can be and now will have to do it again. All levels of the manufacturing food chain will need to test their sourcing models in order to be ready for the next crisis: is single component sourcing a good idea in practice? While stockpiling excess components can be costly, is it worth making sure that production lines won’t shut down when the next component shortage occurs? Should blockchain technology be used to bring greater transparency on supply issues?

These issues (and many more) will need to be considered in defending the industry from the challenges the past two years have presented.…