How global supply chains impact the motor industry
Global supply chains are, for many of us not directly involved in the industry, invisible operations that we don’t tend to notice. However, when we start thinking about the amount of logistics involved to keep supermarkets, shops and just about everything where you buy something from stocked, it’s a huge feat of organisation and logistics.
It’s when this starts global supply chain starts to crumble that we notice. Suddenly things aren’t readily available, shop shelves are empty, and we have to wait weeks, even months, for something to arrive. And the motor industry is not immune, so protect yourself against all eventualities with gap insurance.
What makes up a global supply chain?
A global supply chain is a network formed between an organisation, its suppliers and customers. This network transforms raw goods into marketable products that are packaged nicely and consumed by the customer.
It sounds simple enough, but thanks to globalisation, supply chains are getting increasingly complicated and convoluted. In an age where we can order goods from the other side of the world, sales, sourcing, procurement, manufacturing, logistics and customer service all play a vital role to keep the chain running smoothly.
Supply chains ultimately determine customer satisfaction, which is why they are fundamentally crucial to a business’ success. However, global supply chains are struggling, and many industries are feeling the burn.
How the motor industry is negatively impacted by global supply chains
- Lack of visibility
The average vehicle consists of over 30,000 components, meaning that global supply chains have to align perfectly in order for all components to be ready when production kicks off. An inventory shortage or a delay in shipping can have huge knock-on effects on production.
- Productive partnerships
Globalisation is a great thing of the modern age, but it doesn’t come without its difficulties. As the automotive industry is finding out, inefficient communication, varying standards, protocols and time zones have made long-distance partnerships challenging.
There has to be a relationship of trust between a company and its supplier. If this breaks down, so does the end-product.
- Environmental challenges
With more and more emission regulations coming into play, the industry faces a huge shift that must be implemented at all points along the supply chain. That includes selecting suppliers who prioritise the issue and third-party logistics that also keep emissions to a minimum.
- Bureaucracy
Building a car doesn’t come without its fair share of form-filling, but since Brexit was finalised, manufacturers are navigating complex European automotive laws and legislation like never before. The change has resulted in longer journey times, added risk of delay and red tape around every corner.
