Top logistic challenges global OEMs face in the automotive industry

While the manufacturing element is arguably the most crucial and important part of the automotive industry, many other factors – such as shipping and logistics – are equally crucial for business success (as without logistics, manufacturing couldn’t happen). Shipping and logistics have always been an area of the automotive sector that presents its own unique difficulties and obstacles. OEMs within the auto industry are continuously faced with these challenges day to day.  As a result, they need to partner with a reliable, efficient Time Critical logistics company; one who can not only provide the high level of service required by an ever-changing and flexible industry such as automotive, but also have significant, sector-specific knowledge and experience. Having worked with – and as part of – the automotive industry, an ideal Time Critical delivery company would be able to navigate the challenges encountered with relative ease. What is more, if a business chooses the right partner, they can manage and overcome many of the associated challenges and obstacles for you.  

Due to the continuous and fast-paced evolution the automotive industry is experiencing, we have put together a list of some of the biggest obstacles supply chain managers in the automotive industry are up against today: 

Demand fluctuation:  Avoid overstocked inventory 

When dealing with any volatile or unpredictable market, there are any number of external factors that are to blame for this. The majority of these (such as Covid-19) are unavoidable and therefore out of the hands of all parties involved, from suppliers to shipping companies and everyone in between. One key factor that can influence the unpredictability of the automotive sector could be the changing attitudes towards transportation. The automotive industry has been forced to shift its focus, looking at economical, electric cars and vehicles that rely less and less on fuel and more on sustainable alternatives. This shift to a more environmentally-focussed position is also increasing consumers use of other options, like public transport. 

This uncertain situation means having an excessive amount of stock on hand is not prudent, and therefore supply chain managers and OEMs need to have a good knowledge and understanding of their data. Monitoring and using this data allow managers to create forecasts for the short term. By analysing these, automotive manufacturers can predict the state of the industry in the coming months. They can work with their Time Critical logistics partner company and by doing so avoid unnecessary overstocking of inventory. An effective Time Critical logistics partner working with any automotive business needs to be able to operate in this way, requiring both flexibility and reliability, coupled together with industry experience. 

Just-in-Time logistics: Precision is crucial

The automotive industry (due to demand fluctuations and its cyclical nature) relies heavily on Just in Time delivery. Materials, parts and components required for automotive manufacture need to arrive at a specific time to prevent production line break down. In fact, any disruptions or delays are not only financially detrimental but could cause huge production hold-ups, with whole sections of the supply chain suffering as a result.  

 
There is a fine line between Just-in-Time and just too late. Supply chain managers require end-to-end visibility, including real-time updates and tracking systems. Having a partnership with a superior Time Critical logistics provider that the business can rely on is critical for any industry. A trusted Time Critical logistics provider will need to be able to accommodate last-minute deliveries as required, as well as Just-in-Time logistics, to minimise delays and the subsequent repercussions. 

The majority of logistical challenges and obstacles can be overcome by partnering with the right company, Royale International is a Time Critical logistics company that has been trusted in the automotive industry for over 2s years. A trusted partner of countless businesses in automotive and beyond, Royale International has an unparalleled reputation for Just in Time logistics and other Time Critical services. To mitigate your business’ logistical challenges, look no further than Royale International. Find out how you can partner with Royale International: https://www.royaleinternational.com/services/time-critical-services/