The Complex Automotive Supply Chain Strives for Flexibility and Stability
Article from MHI Solutions Magazine
A single automobile is the product of an intricately complicated supply chain with sometimes far‑flung sourcing and myriad suppliers. In fact, a typical car has more than 30,000 parts, underlining the complexity of the global supply chain network necessary to manufacture each vehicle, according to Nichole Allem, a customer communications manager with Maersk. The network “encompasses a multitude of interconnected processes and entities, including raw material extraction, component manufacturing, assembly lines, logistics and distribution channels. This global network involves numerous stakeholders such as Tier 1, Tier 2 and Tier 3 suppliers, original equipment manufacturers, logistics providers, dealerships and aftermarket service providers.”
For that reason, the success of the auto industry rests heavily on a supply chain that runs smoothly and efficiently—issues anywhere in the chain can create major and costly disruptions. The automotive industry has “gone through a lot over the last several years,” most prominently the supply chain shortages that accompanied the COVID‑19 pandemic, according to Mike Wall, executive director, automotive analysis, S&P Global. Sales slumped as a result, but they have been bouncing back, though they still have not returned to 2019 levels, he said…
