The automotive industry is currently going through one of the biggest changes of the past 100 years. With driverless cars and more environmentally friendly vehicles taking the front seat, car supply chains are set to see rapid changes from beginning to end.
Nissans recent announcement that it is to build two new models in the UK has given the industry a much-welcomed boost. After initially considering a move away from the UK in the run up to the EU referendum, their commitment to stay has instilled a new confidence in UK car manufacturers.
This boost not only encourages the expansion of Nissans 28,000 strong supply chain but the growth of smaller UK car supply chains too.
UK Manufacturing Growth
The percentage of British built vehicles has risen from 36% to an incredible 41% in the past 5 years. As we move into 2017 and beyond, this is likely to rise further to 50% - an impressive win for UK car supply chains. The sheer rise in British built cars is likely to provide some fantastic expansion opportunities, if UK car manufacturers can quickly whip their supply chains into shape.
Smoother Supply Chains
With rapid expansion comes rapid change and for automotive supply chains, this can be tricky. Both parts and vehicle production must run like a well-oiled machine, with a constant stream of essential components making their way through the production line. Backlogs in any area of the chain can lead to delays and loss of profit, which is why supply chain optimisation is the key to success.
Space optimisation is particularly important in the car supply chain, as space is usually scarce and both storage locations and pick up points can have a dramatic impact on timings. During rapid expansion, costs can also spiral out of control, with an immediate need for more employees and more space.
Working with a supply chain specialist, both larger and smaller companies can rapidly optimise their supply chains, minimising chain challenges and creating better opportunities in the future.
Skills Shortage Challenges
One challenge that is looming over car supply chains is a serious technical skills shortage. This shortage could lead to abrupt stagnation, forcing companies that have the potential for growth to stay put due to a lack of qualified workers.
To combat this, many manufacturers are looking for professional advice to help optimise their supply chains. The implementation of work ‘robots’ and dispersal of employees are just two ways supply chain consultants are tackling this issue.
Leveraging transferable skills from existing workers, such as employees from the rail or aerospace industries is also being encouraged.
In the immediate future, car manufacturers will be looking at a range of simplistic and innovative ways to tackle this shortage before it has a direct impact on their supply chains.
The Role of SMEs
Small engineering firms and car manufacturers are leading the way in innovative vehicle design. Less red tape means that many SMEs can create and produce new ideas in a fraction of the time of larger companies. This provides the market with fresh and innovative designs that can be put into practice faster.
Alongside this, supply chains are often smaller and easier to manage, enhancing productivity and allowing managers to quickly asses each employee’s role within the chain.
New automotive manufacturers are leading the way in the industry but without a smooth and productive supply chain, businesses will continue to remain stagnant.