DHL: ‘re-evaluate automotive supply chain to prevent future crises’
Logistics giant DHL has commissioned a new white paper which makes the case for a re-evaluation of the automotive industry’s approach to its supply chains and logistics, in order to prevent future crises.
The report – entitled ‘Lean and resilient: the new automotive supply chain hybrid’ – is by Lisa Harrington, president of the lharrington group LLC, and was prepared in collaboration with DHL. Harrington is also associate director of the Supply Chain Management Center and lecturer of supply chain management at the Robert H. Smith School of Business, University of Maryland.
It argues that supply chains must become more resilient and agile in order to survive the ‘butterfly effect’ – whereby a small change at a localised point in the chain can result in much wider consequences for the business, such as loss of customers or brand reputation, and billions of dollars off its bottom line.
Expert interviews and analysis of past incidents reveal how companies risk critical damage to their business if they are not in a position to anticipate and respond to the increasing unpredictability and vulnerability of their supply chains in light of economic volatility, natural disasters and political unrest.
The white paper maps the evolution of the automotive industry and sets out the benefits of re-evaluating and revising its logistics operations – and establishing new ‘hybrid’ supply chains that are simultaneously lean and resilient, by adding in controlled redundancy and contingency options to protect against failure.
Four major trends are identified by the paper as being responsible for reshaping the automotive sector: global growth and emerging markets; the shift to multiple model or platform production in a single plant; the location of new plants closer to end customers; and relentless pressure to drive down costs.
