Editor’s Note: This article is part I in a multi-part series on the automotive supply chain. Read the second part here.
In the automotive industry, reliable supply chains are crucial for efficient manufacturing processes. One critical aspect is managing inbound manufacturing parts effectively and ensuring that the necessary components arrive on time for assembly. So how can original equipment manufacturers (OEMs) stay ahead of supply chain disruption to cut costs, enhance efficiency, and keep customers happy? Real-time visibility is here to help. Here’s how:
Balancing Safety Stock and Production Demands
OEMs rely on a vast network of suppliers to provide the numerous parts and components needed for vehicle production. Manufacturers, looking to prevent line shutdowns at all costs, need to maintain sufficient inventory levels. As supply chains begin to normalize, OEMs are prioritizing just-in-time inventory strategies and looking for opportunities to decrease safety stock, as these strategies are optimal for inventory management and reduce the need for working capital.
Real-Time Inventory Visibility
Here’s where project44’s real-time transportation visibility platform comes into play. By connecting the dots from when inventory leaves suppliers to its arrival at auto manufacturing plants, project44 provides real-time data for confident inventory management. This visibility helps OEMs strike a balance between safety stock and production plans, avoiding unnecessary inventory holding costs.
Accurate ETA and Risk Mitigation
As inventory moves in transit, project44 provides accurate estimated time of arrival (ETA) information for international and domestic suppliers. OEMs can proactively manage disruptions and implement risk mitigation strategies based on real-time data provided by project44. For example, if project44 detects a delay in the arrival of critical components, OEMs can take corrective actions, such as air expediting, to prevent line shutdowns and maintain production schedules.
Accurate ETAs also allow OEMs to make confident decisions about whether to expedite shipments. They can rely on precise data rather than expediting out of an abundance of caution, ensuring that actions are taken based on genuine need rather than uncertainty surrounding ETAs.
Dynamic Lead Times and Market Intelligence
Through project44’s platform, OEMs gain access to dynamic lead times and market intelligence even before placing purchase orders. This information empowers them to optimize transit times, adjusting purchase order timing to reduce safety stock costs. By integrating this data into their planning systems, OEMs can make informed decisions and streamline their inventory management processes.
Cost Savings and Efficiency
By leveraging project44’s supply chain visibility solution, OEMs can achieve significant cost savings. The elimination of unnecessary air expedite costs, resulting from improved ETA confidence, can amount to millions of dollars. What’s more, project44 helps reduce demurrage and detention fees associated with inbound shipments, further optimizing transportation spend.
The efficient management of inbound auto parts is a high priority for automotive manufacturers looking to ensure uninterrupted production and minimize costs. project44’s advanced visibility solution gives OEMs real-time insights into their inventory in transit, enabling them to optimize safety stock, streamline production plans, and implement effective risk mitigation strategies. By leveraging project44’s expertise, automotive companies can enhance their supply chain efficiency and maintain a competitive edge in the industry.
Want to learn more about how automotive companies partner with project44? Read the exclusive eBook here.