'Think like a supermarket to transform automotive supply chains'

After years of decline, the UK vehicle manufacturing industry is undergoing a welcome resurgence. By 2017 it is expected to be turning out more than two million vehicles per year, a new record according to the Society of Motor Manufacturers and Traders (SMMT).

Turning such growth into long-term revenue and jobs for the UK’s wider automotive sector will depend on the industry’s ability to source more components from within the UK. This essentially means reshoring much of the supplier base that has, over time, been moved overseas.

However, automotive manufacturers are worried not only about a lack of suitable suppliers, but also about the ability of those that do exist to deliver components at the speed and volume required by the vehicle manufacturers. There is a perception that UK suppliers lack the technical or processing capability to undertake the business.

So what can the UK automotive supply chain do to address these concerns and ensure they can offer the kind of world-class, high technology products required by these manufacturers – and offer them quickly, effectively and cost-effectively?

For many years the manufacturing sector has struggled to successfully implement product life cycle management and enterprise resource planning software systems. But in an increasingly IT-enabled, machine to machine, big data world, creating and delivering world-class parts and systems relies on the effective use of software at every stage. From research and development through to production, performance and distribution, and even within the parts and systems themselves, software is everywhere, embedded and critical.

Other sectors have been here before, and have found a way to make it work. The UK retail sector is completely reliant on software systems to deliver its business goals and secure a profit from very small margins. Ask any major retailer about their supply chain history and chances are they can recount an incident involving software or technology failure that had a disastrous effect on their business.

Reducing risk requires taking control of software systems and applying innovation to tried-and-tested quality assurance methods. For a supermarket that can include the software embedded in products and services, in driving ERP systems, powering warehouse logistics solutions, or enabling new digital marketing platforms or managing increasingly complex pricing and re-ordering systems.

The software needs of consumer online grocery shopping may seem a world removed from the automotive supply chain, but in fact it is not. The quality assurance and testing approach is just as valid for the manufacturing supply chain, as they are not only concerned with the shipping of finished goods but with most of the product development activities as well.

In 2013 the Automotive Council identified six main areas for action. These include developing process excellence capability, reducing total delivered cost, strengthening supply stability, and improving supply chain flexibility and complexity management – all areas where robust and tested software systems will prove critical.

The message is clear – giving your business the software backbone that will enable it to compete in the global marketplace could make the difference between success or failure. And if the automotive industry is to reach and sustain the record-breaking production levels predicted by the SMMT it must ensure that its software is ready to meet these demands.

☛ Martyn Jeffries is head of automotive solutions at SQS

A special edition of Supply Management looking at the retail sector will be published in March.

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