Chip Shortage Highlights Supply Chain Challenges for Auto Industry

Manufacturing Costs

Because of the nature of shipping bulky and heavy parts and supplies for automobile manufacturing, logistics managers must have a clear understanding of lead times and the availability of carriers capable of handling such loads. Not having the right inventory at the right time can affect manufacturing times and costly re-tooling, as well as affecting customer satisfaction by causing late deliveries.

Fluctuating Product Demands

The automotive industry is highly susceptible to the volatility of customer demand. If demand for an automobile or product decreases significantly then carrying too much inventory on the shelves can be costly. Manufacturers and assemblers need to carry just enough overstock so that product demand is met but not too much such that they are left with piles of inventory if the demand decreases.

Outside and Environment Impacts

No one predicted the true impact of the recent global pandemic. And very few, if any supply chains were prepared for the ripple effect the chip shortage would have. Some estimates project the automotive industry could take a $60 billion hit in revenue.

Utilizing the LaneAxis Solution…

Broker backlogs versus going direct

Segmented Networks

Today most shipping companies have long-term contracts with third party logistics companies (3PLs) or agreements with brokers to handle their shipping needs. Those contracts can be costly and time-consuming. Also, by utilizing brokers the shipper typically has very little control over or insight into the status of shipments. It is either done through email or phone calls — both time-consuming and very inefficient.

Visibility

Route Optimization

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