Automotive supply chain management

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Supply chain recovery: Rebuilding the automotive sector following COVID-19

There is no doubt that the coronavirus pandemic, and consequently the unprecedented closure of manufacturing plants across the world, has had a far-reaching impact on the global automotive economy. As lockdown restrictions begin to be tentatively eased throughout May and June, assembly plants and supply chain automotive manufacturers are starting to reopen and rebuild their operations across the globe. This article examines the impact of the pandemic on the automotive supply chain. It includes the challenges the sector faces in getting its workforce back to work safely in COVID-proofed facilities, the measures it needs to consider to secure resilient and robust supply chains, and the sustainable frameworks and practices it needs to adopt to ensure resilience as it moves forward through the recovery phase and beyond. It also highlights some of the mobility trends that have been accelerated due to consumer behaviour changes as a result of the global pandemic. The current automotive and mobility landscape Furlough, closure, consolidation, and downward forecasts are sadly all common words and phrases used in conjunction with today’s global automotive sector. In the wake of the Coronavirus, production has slowed or stalled completely and original equipment manufacturers (OEMs) have had to rethink and reschedule new vehicle introductions as new-vehicle demand almost halts. It’s expected that global light vehicle production will fall more than 20 percent to around 71 million units in 20201. This prediction is of course dependent on how quickly global economies can recover and whether there are further outbreaks of the virus, resulting in full lockdown measures being reintroduced down the line. Either way, the pandemic has hit the sector hard and the recovery could take years. And switching focus for a moment onto the automotive aftermarket, this segment of the sector has tended to fare reasonably well in previous economic downturns, with consumers opting to retain their existing vehicles rather than make a new purchase. However, the COVID-19 lockdowns imposed worldwide have impacted here too, with vehicle miles travelled and collisions drastically reduced. But, in a climate where public transport is reduced or avoided, the easing of lockdown restrictions and opening of garages may conceivably result in a small upturn for the aftermarket, provided parts are readily available. Automotive standards to reboot the supply chain The automotive sector and broader global manufacturing sector face the same challenges. In the very early stages of recovery, they will be focussing on how to make facilities COVID-proof and how to safely return its workforce back into the manufacturing environment. Many manufacturers, including Ford, have developed comprehensive manuals which detail new guidelines and practices relating to the cleaning and disinfecting of workstations and common areas, measures for increasing handwashing, the placement of hand sanitizers, temperature scanning on arrival, social distancing, the use of Personal Protective Equipment (PPE) including masks and face shields, and ramped up cleaning schedules. The automotive standards PD IDO/PAS 45005 and BS EN ISO 45001 Occupational Health and Safety can be implemented to help with general guidelines for creating safe working environments during the COVID-19 pandemic. It also considers employee wellbeing, shining a light on the critical importance of demonstrating to employees that they are taking all the necessary precautions to reassure staff that measures are in place to keep them as safe as possible, and being on hand with advice on how to effectively manage stress and anxiety during these challenging times. And in addition to personal health and safety, equipment that has sat idle for weeks or months, will need to be serviced and checked for safe operation before manufacturing can resume. This, of course, all takes planning and time. Navigating new automotive supply chain models On the subject of supply chain disruption, we may see further parts shortages but also opportunities to rethink supply chain models, putting the sourcing of raw and assembled materials under the spotlight; including reassessing the geographical diversity of supply chains to spread the risk away from a single region in case of further lockdown to minimize disruption to supply, reducing reliance on a single supplier, setting up early warning inventory systems to help anticipate and mitigate material shortages, and perhaps rethinking ‘just in time’ lean methodologies. For automotive organizations facing some of the challenges highlighted, BS 65000: Guidance on organizational resilience is essential reading. Information resilience and the risk of homeworking Away from manufacturing, let’s not forget the back-office staff who may continue to work remotely from their homes during the recovery phase. Keeping information secure and IT systems and networks operating effectively during a disruption, such as the current pandemic, can be a challenge. Staff may be using home networks, opting for local storage if connections are slow and for many, this is a whole new working style. Internationally recognized standard BS EN ISO/IEC 27001 is an excellent framework that helps organizations manage and protect their information assets so that they remain safe and secure. It helps you to continually review and refine the way you do this, not only for today but also for the future. It’s crucial not to forget these homeworkers too, who also play a critical role in keeping OEMs and the supply chain operating efficiently. Disruption to future mobility trends So, what’s the overall impact of all of this on the mobility environment? Whilst the uptake of ride-sharing and public transport has already decreased, and some players have delayed or revised their development plans, there are other segments of mobility that could enjoy unique growth opportunities as consumer habits evolve post-pandemic. There has been renewed focus on contactless delivery during the pandemic, not only for medical and food supplies but for the delivery of other goods too. So, it could be anticipated that advances in autonomous driving technologies for delivery devices accelerate in the new post-pandemic world. The 'Next Normal' There is much discussion in the media about a new reality following the devastating impact of COVID-19. It’s unclear how long the recovery of the sector will take, but what’s certain is that the impacts will be long-lasting and far-reaching. Make your organization’s recovery from COVID-19 as seamless as possible, by adding our key automotive standards to your collection. Discover BSI Knowledge As the industry continues to rebuild and navigate emerging challenges, meeting the relevant standards will be vital for your customers, your supply chain, and your competitive edge. Our tailored BSI Knowledge subscription service provides flexibility, access, visibility, and control over the standards and insights your team needs to achieve this objective. With over 2,000 automotive documents available in our GBM27 module, finding the right standards for your business needs just got easier. Request to learn more.

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