Back at the beginning of the year, we discussed the most likely trends for 2016 in the automotive supply chain industry and how these developments would shape the landscape of production and supply for the next 12 months and beyond. Now, as we’ve passed the halfway point of 2016, we thought it would be interesting to revisit our predictions and review which ones have come to fruition and how these trends have impacted day-to-day operations in the manufacturing and supply stream.
Like we discussed in that initial blog entry, each new year brings fresh opportunities and obstacles for supply chain planners and managers in maximizing efficiency, containing costs, and maintaining steady growth. But as we’ve seen in the first half of 2016 alone with the passage of the TPP, the Brexit movement, increased manufacturing presences in Mexico, and other geopolitical and economic developments, the production and supply playing field can vary from month to month or even week to week.
In addition, planners and managers must adapt and keep pace with advancements, updates, and modifications to the various software and technology solutions available to help create an efficient, cost-effective manufacturing and supply network. On this score, the first half of 2016 has been a relatively quiet period of major intelligent solution developments - though quiet, doesn’t necessarily mean unimportant.
With this in mind, let’s connect the dots from the beginning of the year to now and examine a few potential trends we pinpointed as core drivers for the supply chain industry during 2016.
Collaboration and Connectivity
Full integration and optimization of supply chain planning software solutions across a company’s entire sales and operation planning landscape was the first trend we predicted for 2016. Big Data and the use of detailed analytics and reporting was predicted to be a core value proposition in helping planners utilize real-time feedback to not only make quick, cost-effective decisions when it comes to inventory, demand, and freight, but also communicate the impact of these decisions to OEMs and others within their company.
Thus far, much of this prediction has proven true as manufacturers and suppliers have utilized big data to refine their production and supply processes and leverage lean principles to increase productivity and enhance end-to-end visibility across all touch points of the value chain. Companies that have incorporated Big Data and detailed analytics as part of their demand planning and production strategies via BOM management, Plan for Every Part, and other intelligent solutions have seen the elimination of functional silos and significant increases in transparency and agility throughout their value stream.
Whether through the implementation of Big Data or a complete overhaul and reinvention of the production and supply network, digitization of manufacturing, supply, distribution, and customer relations has thus far proven to be a key discussion point and critical driver of growth and sustainability in 2016. From planning to distribution, sales to reporting, digital technology has streamlined and made the way manufacturers receive and process orders, plan production programs for those orders, and deliver the final product to customers more efficient.
Plus, with the proliferation of digital technology and advancements as to how it can be applied to the manufacturing link of the supply chain, OEMs now have the tools to implement digital elements into their production processes and facilities in order to reap the same benefits other portions of the value chain have been experiencing for years.
At the outset of the year, we predicted the proliferation of smaller, more mobile technologies - smartphones, tablets, and other handheld or personal platforms - would be a significant factor in how OEMs and suppliers manage production and supply processes throughout the course of the year. While mobile technology has certainly been an important aspect of the global supply chain thus far in 2016, what’s perhaps been more important is overall increased connectivity between manufacturers and suppliers.
With the emergence of new and expanding markets and the increasingly complex management strategies of operating multiple production sites across the globe, enhanced connectivity - whether through smaller tech or otherwise - has become a fixture in discussing efficiency of production processes and strategies. Leveraging technology as a way to unify and connect production, warehousing, and distribution facilities has emerged as a top priority for companies in cutting through the complexities of global manufacturing management.
Second Half of 2016?
It’s difficult to predict what the second-half of 2016 will bring for the automotive manufacturing and supply industry. Our first-half predictions - which also included a greater emphasis on sustainability and green technology - have more or less been realized as the industry attempts to simplify by leveraging intelligent solutions and processes for cutting through complexity and eliminating potential for disruptions and breakdowns across the value chain.
But even though many of our first-half predictions have come to pass with primarily positive influences on today's global supply chain, uncertainty regarding the impact of Brexit, the November U.S. Presidential election, and overall strength and growth of the world economy could potentially have significant impacts on the movement of parts and products across the globe. It's easy to sometimes overlook the fact that the automotive supply industry is very much reliant on the fluidity of trade and movement of products between different countries. Disruptions or setbacks to the movement of products and the commerce resulting from trade due to geopolitical instability can be a key factor in whether a company’s supply chain operates as efficiently, productively, and profitably as possible.
Nevertheless, it will be interesting to see going forward, especially as the automotive production industry ramps up for its busy summer and early autumn production cycle, if these trends continue to develop or become static and how companies respond as they strive to remain productive and competitive for the remainder of 2016 and into the new year.