This document summarizes interviews with automotive executives about challenges in supply chain management. Key challenges identified include the complexity of global supply chains, intense cost pressures, and difficulty integrating diverse computer systems across organizations. Both manufacturers and suppliers cited issues around inventory management, globalization, and increasing complexity. Moving forward, the document recommends better linking forecasts to material requests, using portal technologies to improve internal and external integration, and integrating functions to improve performance and create consistent organizational cultures.

1. SUPPLY CHAIN MANAGEMENT
NEW COMPETITIVE REALITIES
By
Nikhil Gangadhar

2. “Why is supply chain so hard?”
 In-depth interviews with twenty-nine
automotive executives
– Sixteen manufacturing and supplier
companies
– Global organizations
– European and North American
Participation
 Interviews covered a broad range of
questions around SCM activities within
the organization and its impact with its
value net
– Current opportunities and challenges
– SCM’s influence on the organization
– Technology’s influence/impact on SCM
– Activities and future plans

3. We broadly defined supply chain management (SCM)

4. We heard several points over and over again
from interviewees
The performance of SCM lags its recognized
importance
 SCM crosses numerous boundaries, both
internally and externally
 Globalization has an increasingly larger impact
on supply chain tasks
Complexity, ranging from company cultures to
product design, multiple sourcing and pricing
configurations continues to create significant
challenges

5. Manufacturers have some specific challenges. . .
.
Intense cost pressures
 Managing the global supply chain
• Establishing additional manufacturing footprints
• Identifying sourcing partners

6. focusing heavily on technology:
 Standardization
– Common nomenclature and data formats
– Common tools
 Integration
– diverse computer systems
– supply chain processes with engineering,
purchasing, logistics, etc
 Implementation of portal technologies

7. Suppliers face similar challenges with a
different twist . .
 Increased complexity of manufacturer orders
Cost and pricing issues
 Risk management in the supply chain
 Collaboration and relationship management in
the supply chain

8. focusing on the use of technology a little
differently
 Connection and collaboration with the Tier N
supply Base
 Cost reduction
Inventory visualization
 Computer system integration

9. Manufacturers and suppliers agree on some of
the most important things. . .
Inventory is the hidden cost within the supply
chain
– Taking cost out is still a major problem
 Globalization has a significant impact
– Identifying and managing suppliers from afar is
challenging
 Complexity continues to increase
– Both product design and in management of
relationships

10. The road ahead for SCM efforts
Key success factors include:
 Better linkages between
forecast and material requests
 Use of portal technologies to
integrate internally AND
externally
 Integration of functions to
improve performance, increase
effectiveness and reinforce
consistent organizational cultures

11. Thank you