Supply chains: with complexity comes uncertainty

Bill Bacon, managing director automotive UK&I at DHL Supply ChainOver the past few years, the global economy has demonstrated one clear fact: with complexity comes uncertainty.

The globalisation of commerce has brought new opportunities to businesses but also increased the potential power of "unknown unknowns" to disrupt an international supply chain. Volatility and uncertainty in global supply chains can cause traditional supply chain management models to break down. Natural disasters, socio-political unrest, economic uncertainty, market volatility: these and more can threaten catastrophic disruption without warning.

The automotive sector has recognised this risk and taken clear action. Together with its supply chain, the industry has set out an aim to revise its operating model and develop supply chains that are simultaneously lean and resilient.

In recent years, more and more original equipment manufacturers (OEMs) have obtained parts from multiple suppliers, and not just traditional tier-one suppliers. This has led to increased complexity in the automotive supply chain, and consequently greater risk. As this risk has been recognised, we are now seeing increasing numbers of OEMs look to gain better visibility and traceability of car parts from suppliers to build knowledge on where potential issues might arise. Not all issues are predictable, for example some natural disasters, but having greater insight ultimately can keep industry running smoothly.

The automotive industry’s journey toward creating supply chains that are simultaneously lean and resilient is still in its early stages. Risk management solutions are, however, available to give businesses the competitive edge in logistics. These tools are designed to protect manufacturing, assembly, reduce emergency costs, enable fast post-disruption recovery, and protect an automotive business’s brand and market share. 

The work towards achieving greater supply chain resilience is still evolving and logistics providers must ensure that industry continues to be supported throughout. It is essential to ensure that both profitability and businesses’ contribution to a strong global economy is safeguarded.

☛ Bill Bacon is managing director automotive UK&I at DHL Supply Chain.

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