Aamer Rehman: service parts supply chains are gaining importance and that a fundamental change is required in supply chain management. OEMs and suppliers need global visibility in order to align and synchronize multi-tiered supply chains for fast responses to demand and supply changes, and to make intelligent tradeoff decisions based on real insights.
In Rehman’s opinion, the automotive sector needs significant improvement in some critical enterprise competencies:
Improving visibility, alignment and synchronization across functions, and more importantly across the supply chain, and with a focus on customer service. This is critical given gradual reduction in vehicle inventory in the channel and working capital reduction pressure across all supply chain stakeholders.
Supply risk management – where companies need to develop core capabilities to detect supply and capacity problems, assess the impact, come up with business tradeoffs and publish the change.
Speed and accuracy of decision making is critical. In this case, automotive companies need to focus on capacity planning and capacity constraint management disciplines and processes in order to remove unnecessary latency and lack of visibility across the value chain.
Collaboration across stakeholders – collaboration is not merely passing data between partners. It is about context and content specific collaboration to understand who is impacted by a change and mutually resolve it inside and outside the enterprise.
Companies need to eliminate information latency between strategic, tactical and execution windows and eliminate the artificial boundaries. For example, a static monthly S&OP reporting cadence is not sufficient. Tying it to weekly and daily execution is critical. A seamless flow through planning time frames is possible only if companies diligently work towards removing the patchwork of applications and Excel. S&OP, capacity planning, constraint management and inventory management processes need to be revisited to establish discipline and alignment in decision making required for globally distributed supply chains.