OEMs need to keep in mind three major considerations — visibility, automation, collaboration — when trying to emerge as industry leaders in the transition to electric vehicles
This article is Sponsor Content presented by TrueCommerce.
The automotive industry is in a state of evolution. Having felt the pressures and insecurity of the pandemic, automakers are looking to improve supply chain processes and increase sales, while tackling the booming market of electric vehicles (EVs). The increasing adoption of EVs is one of the most prevalent trends in the automotive industry today. Driver concerns surrounding charging stations and battery range are decreasing while the need for more sustainable means of transportation heightens.
The global semiconductor chip shortage continues to plague the automotive market, making it difficult for manufacturers to maintain production and meet demand. Still, companies are finding ways to get around the shortage. One of the largest manufacturers of automotive chips, Infineon, has even increased its investment in production of the chips by nearly one billion euros.
Despite the chip shortage, EV sales continue to rise worldwide, with many companies and governments making commitments to expand EV production. This has led to EVs becoming more viable, affordable and competitive.
The question becomes, what does it take to not only keep up with the industry changes but to get ahead? Below are three fundamental strategies to consider when looking to enhance your EV automotive supply chain.
Visibility into the automotive supply chain is essential. Without complete, real-time visibility into the status of necessary components, it’s nearly impossible to meet production requirements and consumer demand. In the current market, this lack of information can quickly prove to be an insurmountable obstacle.
“Global supply chains need to be able to anticipate disruption, be agile to change, and rely on data-driven decisions,” says Shawn McEwen, Regional Vice President of Automotive and Industrial Manufacturing at TrueCommerce. “With visibility into real-time data across all systems and processes, leading manufacturers that embrace this digital-first vision can drastically enhance decision-making, leading to improved customer service and significant cost savings.”
Supply chain automation significantly reduces manual entry processes, which leads to fewer errors, and fewer hours spent typing in data means you can reallocate important resources. It also means you won’t need to hire additional staff just to process orders.
In addition to these efficiency improvements, supply chain automation also increases order processing accuracy. Integrated systems can process hundreds of orders in minutes while avoiding error-driven chargebacks. Since we know that OEMs value both speed and accuracy, this can help strengthen your trade relationships. Automotive supply chain solutions with advanced automation capabilities also enable real-time monitoring, reporting and alerts to ensure global standards for the automotive industry are met.
It’s no surprise that businesses are looking for ways to expand their market reach and cut costs. Many EV automakers, such as Canoo and Rivian, are partnering with retail and shipping companies to help further their brand and increase EV infrastructure. This, in turn, aids those corporations in meeting their delivery and sustainability objectives.
Collaboration also extends to partnerships between suppliers and manufacturers to advance EV production to meet the rising consumer demand. Earlier this year, General Motors entered into three new supplier agreements to secure the materials necessary to hit their EV production targets. GM now has secured all the raw materials it needs to get to its goal of building one million electric vehicles in North America by the end of 2025.
While the current market poses new challenges, the solution to overcoming industry supply chain disruptions lies in increasing prioritization of integration technology and collaboration. By leveraging the power of an automated supply chain, electric vehicle automotive manufacturers have more options and are better equipped to act on opportunities to cut costs. Utilizing this technology while establishing beneficial partnerships within the industry will lead to a more transparent, integrated and resilient automotive supply chain.