Auto firms collaborate to cut risk

25 April 2013

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25 April 2013 | Paul Snell

Automotive companies are collaborating to develop a tool that will allow them to respond more quickly to supply chain disruption.

Toyota Motor Europe, Aston Martin and Jaguar Land Rover - with the help of Achilles and Lord March, operator of the Goodwood motor festivals - are developing a system to identify and manage risk in the supply base.

One part of this system is a supply chain mapping tool, where first tier suppliers will enter details of their suppliers and cascade the request for information down the supply chain, giving the manufacturers greater visibility of potential risks.

Speaking to SM, Guillaume Jacques, purchasing general manager, projects and strategy planning at Toyota Motor Europe, said: “With the supply chain pre-loaded into the system, if there is a problem in the future – whether it is widespread like an earthquake or flood, or a supplier on fire or going into liquidation – we will be able to clarify the impact into our supply chain much quicker than in the past.

“In the past we were asking our tier one [suppliers] please confirm if you have any suppliers in the affected region, and they had to cascade it down and it was taking up to two months for something like an earthquake. So hopefully this will help us grasp 80-90 per cent of the problem in one click. We will be able to know all our suppliers and sub-supplier located in that area and understand the impact on our operations.”

Jacques added the data provided would also help the company be more proactive at managing risk. For instance it would help the company establish which components would take longest to find an alternative supplier, and work with vendors to address the issue.

The supply chain mapping tool will launch in June, and the data inputted by suppliers is confidential, so manufacturers cannot see the details of their competitor’s supply chains.

The system also includes an online portal, which provide a standardised questionnaire for suppliers covering health and safety, compliance and financial stability, among other areas, reducing the administrative burden on vendors who work for all the companies. And it also features a financial analysis model, which acts as a financial health check on suppliers.

And according to Luis Olivié, global business development director at Achilles, the approach is one that could be copied by other sectors. “What the horse food scandal has shown is there is no visibility beyond the tier one suppliers in the food sector. So it is very much the same thing in many other sectors,” he said.

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