The automotive OEM market is currently valued at US $243 million. It is expected to reach US $296.22 million by 2033. This growth can be attributed to advancements and the increasing demand for hybrid vehicles. This article explores strategies aimed at improving the OEM supply chain through B2B supply chain management that lie ahead in this industry.

Top 6 B2B Supply Chain Strategies in Automotive OEMs

Lets learn more about how these strategies are resolving the complexities of automotive OEM: 

Lean Manufacturing

FedEx’s adoption of lean manufacturing during the 2008 recession is a prime example for the automotive OEM industry. By introducing 68 C-check milestones, FedEx reduced maintenance man-hours from 32,715 to 21,535 and doubled annual C-checks, leading to significant cost savings. Automotive OEMs apply these principles to synchronize production with demand, minimize inventory, and continuously improve processes, enhancing efficiency, reducing costs, and improving customer satisfaction.

Global Sourcing

Global sourcing in Fiat Auto’s Project 178 significantly reduced costs and diversified the supply chain, leveraging international expertise for quality and innovation improvements. This strategy facilitated market adaptation and strengthened supplier relationships, underscoring its importance in automotive operational efficiency and competitiveness.

Just-In-Time (JIT) Inventory

Just-in-Time (JIT) inventory, pioneered by Toyota, revolutionizes automotive parts distribution by minimizing inventory costs and storage, thereby streamlining the supply chain. This strategy enhances efficiency and quality control, as parts are ordered and inspected only as needed. Auto manufacturers utilizing JIT enjoy optimized inventory management and reduced transit times, significantly boosting production efficiency and industry performance.

Supplier Relationship Management

In B2B supply chain management, it is essential for automotive competitiveness, focuses on operational efficiency and navigating supply chain transformation challenges. Effective SRM, as shown in research involving 673 automotive executives, helps OEMs handle disruptions like production volatility and raw material cost fluctuations. This approach, crucial for industry competitiveness, enables OEMs to optimize production schedules, manage risks, and enhance product differentiation, especially during significant industry transitions.

Conclusion 

The supply chain transformation in the automotive OEM market thrives by adopting lean manufacturing, global sourcing, and strategic partnerships, driving enhanced production and sustainability. This approach is pivotal for industry leaders seeking economic gains and ecological responsibility. Insights and methodologies from the Moglix case study can guide stakeholders through this transformative journey.. For in-depth insights and guidance on adapting to these industry changes, learn more at Moglix Business.