The supply chain of the automotive manufacturing industry is vulnerable to risks. At some point and for varying time frames, companies experience bottlenecks or sticking points in their supply chains.
These are not just one-time events but major inefficiencies that create a ripple effect through the rest of the supply chain. The downtime on a neglected sheet metal stamping machine causes delays in shipping and delivery. A rushed testing process results in unusable products, costing the company time and money and creating friction with customers.
Bottlenecks can look different from company to company, but several are consistently present throughout the automotive industry. In this blog post, we’ll detail these bottlenecks and the measures every automotive company should implement if they haven’t already.
5 Common Bottlenecks That Cause Supply Chain Disruption
From stalls in production to overstocked or understocked supplies, the issues associated with bottlenecks translate to lost time, lost money, lost reputation and reduction in product quality for you and your customers.
Typically, bottlenecks that cause automotive supply chain disruption are caused by the following events:
1. Unaudited Processes and Workflows
A company’s manufacturing process is the umbrella under which all workflows exist. Without a close eye on the overall processes — from the design stage to production to delivery — companies are at risk of experiencing:
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Product recalls
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Defects of final products
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Loss of customer loyalty
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Damage to brand reputation
One of the more recent and famous examples of faulty processes comes from the 2016 Toyota vehicle recall. Because of problems with defective fuel tanks and airbags, Toyota recalled 3.37 million vehicles, creating significant expenses for the company and a hit to its brand name.
Although reworking, redesigning and retesting overall manufacturing processes is costly and time-consuming, quality measurements and procedures are worth it to avoid the potential future costs if they are neglected.
2. Skilled Professionals Shortage
Worldwide, the pandemic created a shortage of skilled professionals, including engineers and technicians. However, even before the pandemic, this challenge was present within manufacturing circles.
The digital transformation in the industry is a key driver of this shortage. As this transformation continues to develop, professionals need to acquire, refine and hone new skills. According to an article from Deloitte, without these adaptations, manufacturers could experience a labor shortage of up to 2.1 million jobs between 2020 and 2030.
3. Outdated Machinery
New manufacturing machinery is notoriously expensive, which is a primary reason why new machinery is avoided even if the signs point toward the necessity of such a purchase.
In the long run, companies that don’t use industry-standard machinery and technology often experience reduced quality and consistency in products and components, increased costs of services and decreased productivity.
State-of-the-art machinery allows manufacturers to create, test and evaluate the specifications of product design and final product to meet the highest quality standards. However, if the cost of this machinery is not in budget, preventative maintenance can lead to longer lifespans of machinery and help avoid a serious bottleneck.
4. Lack of Automation and Technology
Automation in machinery and software creates efficiencies in repetitive processes with little to no critical input required. For example, robotic welding is an automated process that requires only a human-made design to function. The rest of the process is fully automated, resulting in a more precise component.
Even so, many companies experience a bottleneck because they settle for manual processes that can easily be replaced by automation, leaving them prone to human error and slower production cycles.
5. Poor Forecasting
Forecasting influences a number of aspects of manufacturing, including but not limited to procurement strategies, inventory management and risk mitigation.
One major forecasting bottleneck occurs because of misculated demand. Having too much product could mean that sales forecasts underestimated demand. Having too little means predictions were off in the other direction.
More accurate forecasting can be accomplished with the right automation software platform that ensures correct quantities for present and future needs by analyzing historical data, sales and forecasts.
Bottleneck Improvement in the Supply Chain Automotive Industry With VPIC Group
No two companies look identical, which means bottlenecks will look different as well.
VPIC Group can help solve some of your partner issues by ensuring our products are produced at the highest quality standard and delivered on time. We do this by:
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Using the latest technology and machinery
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Executing preventative maintenance on existing machines
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Following our standards and procedures for risk mitigation
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Building partnerships with a diverse group of raw material companies and logistics companies
We understand that manufacturing is more than just producing the component — it’s about finding efficiencies where they don’t exist. When we succeed, our partners succeed too by benefiting from our cost and time savings.
If you’re looking for more ways to optimize your supply chain, read through our e-book, The Supply Chain Optimization Guide.
