Automobile Industry
Current Issue:
In terms of sales, 2014 saw fluctuating fortunes for the industry with stretches of decline followed by consecutive rise before falling in October again
Besides sales decline, the industry also faced a number of challenges in the form of abundant vehicle recalls, and censure for safety issues. Solution: FMEA, Root cause analysis, Quality checks and Improvement processes, World-class technology (like in Germany and Japan), setting up targets/benchmarking with those competitors can be in place
Demand Mgmt: The challenge here is that the period is fairly long (typically one month) relative to how fast market conditions (e.g., gas prices, the stock market) can change.
Solution: Four major elements of demand: – prediction – communication – influence – prioritization and allocation * checking inventories twice a month. * prioritize orders for cars that are already sold to customers over cars that will just sit on a dealer’s lot * a highly structured operations planning system (with advanced planning and scheduling and ERP) that is more akin to a push approach
Product Development: Vehicle development is expensive, time-consuming, and risky. Costs to design, engineer, and tool a major new model can reach into the billions of dollars
Solution: looking for ways to reduce development time and cost to improve profitability and to better react to market changes,Performance measures and efficiency analysis for product variety
Risk management in automotive supply chains: The automotive supply chain is difficult to change. It can take six to 12 months to replace a supplier of highly customized parts. Safety regulations require testing of new modules, auto makers are increasingly dependent on suppliers.
Solution: links even with lower-tier suppliers to ensure appropriate control throughout the supply chain,Vertical