Auto Supply Chain Supply Chain Management in Essay

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Auto Supply Chain

Supply Chain Management in the Auto Industry

The benefits of effective supply chain management are manifold. The ability to project sales, production, demand and inventory in correlation to one another is essential to ensuring that an automaker maintains critical demand schedules.

Benefits and Risks:

Remarkably, the benefits and risks of supply chain management in the automotive industry are closely intertwined today. On one end of the spectrum, auto makers are finding that there is a sudden surge in demand for both automobiles and associated parts. According to the text by Miziolek (2011), maintaining a rapid and responsive supply chain strategy has helped many automakers to stay on pace with this rising demand. However, there is a considerable risk that many face today. As Miziolek notes, the sudden rise in an industry that was struggling to stay afloat half a decade ago means that demand for shipping needs has suddenly outstripped supply.

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By Miziolek's reporting, "boom times' of a sort are back for the automotive industry, with 93% of respondents saying they've experienced an increase in demand for their vehicles, parts and services in the past year. Yet despite such optimism, more than a third of the executives polled by Dykema (39%) believe that raw material costs will pose the greatest challenge to their company's supply chains in the coming year." (p. 1) There is a real risk in take on more order volume that a given auto company's contracted fleet can handle. And during a fragile recovery period for the wounded industry, few companies could afford any type of delay in meeting the demand of customers with….....

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