How automotive supply chains become more resilient

This work aims to present the elements related to production and logistics that companies have used in the last four years and that can lead managers to a correct decision in times of uncertainty based on the literature review. During the pandemic caused by COVID-19, industrial companies in the automotive sector had to adapt to the sharp drop in demand, varying negatively by up to 40% from March to November 2020. As of December 2020, demand increased again, recovering the fall from the pandemic’s beginning. Thus, a supply chain did not have enough time to recover and meet that speed. Even with international air freight, there is still a halt in automaker’s production lines in the automotive sector. Illustrating that context, we studied a case in a company that operates in Brazil, which produces automotive components for a manufacturer of heavy cargo and passenger vehicles. The company was impacted by the COVID-19 pandemic due to its low level, heightened by its suppliers’ delays. The results indicated the need for the company to be prepared for the increase in costs and the search for strategies that minimize the negative impacts still caused by the pandemic context.

Shortly after the outbreak of the global COVID-19 pandemic in early 2020, governments around the world enacted new border regulations for people and goods, some of which are still in effect 2 years later. Modern supply chains, which often span the entire world, have shown to be vulnerable to such changes. Additionally, trade wars often restrict import and export capacities or lead to increased costs. This in turn might trigger managers to increase, where possible, local production. Such new capacities were designed to be temporary, but a public debate to configure less globalized supply chains has already started. This configuration of supply chains can be understood as the supply chain structure (the supply chain units and the links between them) and the key attributes of the supply chain. These key attributes can be divided into functional attributes, such as the procurement and the distribution type, and into structural attributes, such as the topography of a supply chain and the integration and coordination. The chapter analyses how supply chains might be reconfigured in the aftermath of the COVID-19 pandemic. It uses the framework of functional and structural attributes as a basis for the analysis. This analysis will directly contribute to the ongoing debate about the configuration of tomorrow’s supply chains.

The automotive sector is considered to be one of the fastest developing industries in the world and contributes to economic growth in many countries. This development however results in an increase of CO2 emissions based on higher numbers of vehicles driving on the roads. Besides, this industry causes other negative impacts on the environment by the supply chain’s activities like material extracting, burning fossil fuels in the production plants and releasing waste. In the recent years, people are paying more attention to environmental issues. Since this topic becomes more urgent, many environmental protection activities are suggested to minimise the harmful influences from the automotive industry. To find long-term solutions, automotive manufacturers have researched and integrated the sustainability concept into their entire supply chain management. The term sustainable supply chain management is, therefore, recognised as an important strategic development concept for automotive companies.

The chapter explains the structural change in the global auto industry and the current situation of Korean auto industry, followed by the risk management of supply chain. This chapter uses the cases of recent disasters to understand the interactions and impacts along the global value chain. In addition, several strategies to minimize the risk of supply chain are proposed: First, Build strong and flexible procurement system; Second, Risk Mitigation with diversification of supply sources; Third, Information network across the supply chain; Fourth, Build a real-time risk evaluation system with quantifiable index and training; Fifth, Minimize the damage with a business continuity plan (BCP).

Current semiconductor shortages, trade obstructions, as well as the COVID-19 pandemic have shown the urgent requirement to rethink existing economic and production structures as well as trade practices. Such global events revealed the susceptibility of value-added structures to environmental disruptions. Especially the complex and highly optimized value chains in the automotive industry were particularly affected. Lack of early warning systems, missing redundancies and ever-increasing dependencies between individual value-added partners can be seen as some of the reasons for the enormous effects the industry is facing. However, looking into the future, fast and flexible product changes might affect the supply chain in similar ways as the current events. To secure value creation and employment and to minimize the impact of future crisis, the industries structures must be made more resilient. This paper provides a contribution to this through an integrated approach.

The supply chain networks that support a business have usually evolved over time, shaped by various market and supply forces and by the expectations and strategic intent of a series of leaders. Recent shocks and higher awareness of risk and shifts on both the demand and supply side are expected to require global networks to be reassessed. This chapter reviews some of the key changes impacting global chains and considers the implications for future supply chain networks and the people who will manage them.

As supply chains have become more global and complex, supply chain disruptions have become more frequent and severe.  It is thus imperative for public and private enterprises to develop and implement strategies to prevent supply chain disruptions from occurring and recover quickly from them when they occur. Enterprises can do so by first establishing an effective supply chain risk management (SCRM) process that identifies, assesses, and proposes strategies to manage and monitor supply chain risks. In this chapter, we review the SCRM process and describe its four stages: risk identification, risk assessment, risk management, and risk monitoring.

The efficiency of manufacturing and service companies can be improved by the implementation of modern technologies. This paper presents concepts and technologies used for digitalization, i.e. smart transformation of logistics processes. Also, this paper presents an emerging concept of Industry 4.0 called Logistics 4.0. The main objective of this paper is to define the role and structure of digital logistics systems in the Industry 4.0 concept. This paper explains the improvement of logistics and supply chain processes by implementing the Logistics 4.0 concept in manufacturing and service companies. The purpose of this paper is to point out the importance of logistics digitalization and to emphasize the importance of technologies applied in the digitalization of logistics and supply chain processes used for the improvement of these processes in companies. The main contribution of this paper is the conceptual framework of Logistics 4.0. Additional contribution is six key criteria defined for the comparison of traditional logistics and Logistics 4.0. This paper is valuable for all companies that tend to implement or introduce Logistic 4.0 as a new business concept.