Car manufacturers demand a high level of flexibility, suppliers expect firm plans for a longer period of time: car suppliers are struggling with this balancing act more and more – worldwide.
According to a study, automotive suppliers are increasingly having liquidity problems due to rising production costs. Three quarters of the suppliers could only partially pass on the enormously increased energy, raw material and production costs to the car manufacturers, according to the management consultancy Horváth after interviews with over 30 company bosses and board members worldwide.
Many companies complained that communication with the car companies and their reliability had deteriorated significantly since the Corona crisis: “There is high fluctuation in the quantities called and hardly any transparency,” said Horváth industry expert Ralf Gaydoul. The relationships between the suppliers and the car manufacturers and also with their own suppliers are becoming increasingly strained. The suppliers are “in the clamp” between the two: “While their customers, the manufacturers, demand a high degree of flexibility with very volatile incoming orders, suppliers expect fixed schedules for the next five years.”
For the study, the management consultancy surveyed board members of automotive supplier companies worldwide with annual sales of between 250 million and 40 billion euros. According to Horváth, the sample includes 30 CEOs and COOs with whom intensive, qualitative interviews were conducted.
Inventory levels and improved operations
Most supplier companies built up inventories in order to be able to react more quickly. Two thirds also tried to save more, improve operational processes and pass on more costs. But only a few of the board members surveyed had already successfully implemented the planned measures.
There was almost unanimous complaint about staff shortages at all levels across all locations. A clear majority of the companies surveyed have problems finding and keeping employees. This already means that shifts in production cannot be filled.
At the same time, the product requirements would become more complex. According to the study, high-quality cars are increasingly being produced in smaller series. According to this, 76 percent of the suppliers surveyed had to adjust their portfolio due to electrification and new customer requirements. However, sustainability is usually worthwhile in terms of costs and supply chains, says Gaydoul: “Examples of this are the high energy efficiency mentioned first and the planned localization of the suppliers.”
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
