How Cardinal Can Support Automotive Supply Chains
The automotive supply chain is composed of a vast number of layers across the globe: suppliers, manufacturers, distributors, and service providers.
Alongside this, to manufacture a regular motor vehicle, around 15,000 to 30,000 component parts are needed. Naturally, a large quantity of material is needed to retain efficiency of the industry.
What are the challenges facing auto-mobility companies when it comes to supply chains?
A great challenge facing the automotive industry is the transition to electric vehicles. This transition has led to the subsequent increased demand of certain components such as batteries and semiconductors. These parts are in short supply, partly due to the disruption caused by Covid-19.
But the overwhelming cause is in the shortage of microchips. Microchips are a critical component in the manufacturing of motor vehicles. This is largely due to strong demand and dwindling supply. Especially due to the advancement of electric vehicles, a further strain that is stretching the industry.
This issue is accompanied by rising costs of raw materials aggravated by a deteriorating relationship between the US and China. Subsequently, there is a lack of visibility of the future of this resource in general.
How could this be improved?
To ensure a sleek transition to electric vehicles, the focus must be set on creating strategic edges that distinguish companies from one another. Whether this is the speed of production or the accessibility of these cars upon release, it’s important that audiences can differentiate final products by their supply chains. Only then will organisations seek to drastically invest in them.
It would also be beneficial to invest in digital software and technologies such as AI to increase efficacy.
Using a 3PL provider will also help automotive businesses resolve their issues, by helping with the communications between parts suppliers and organising the flow of shipments.
Also, clearer visibility into the availability of materials for manufacturing, especially for hard-to-procure components such as semiconductors, rare earth metals or other battery elements, would ensure efficiency.
Value of expertise in auto-motive supply chains
Here at Cardinal, our in-house team analyse your customs records to ensure all classifications are correct and amend the ones that aren’t. We give insight wherever you need it, helped by our award-winning supply chain platform, Leda, giving constant updates on the status of your cargo, shipments, and client documentation wherever you are.
The automotive arena can be stressful, so why not have peace of mind when it comes to customs, stock, and shipment, so that you’re able to dedicate more time to areas of the business that generate the most impact.
If you have any questions or queries, please do not hesitate to contact a member of the team.