You're facing a surge in demand for automotive components. How do you navigate this sudden shift?

One thing I see missing is the collaboration with the OEM. We might have capacity and/ or raw material shortage. However, these can be mitigated by working closely with the OEMs. Usually, a collaborative approach works here. We assess the requirements and what we can deliver. With an open communication with the OEMs, they have a clear idea of what components are coming when. The OEMs can also adjust their production plan accordingly. Thus, we can eliminate production stoppages of OEMs along with service level loss at our end.

A mi me resulta importante saber la capacidad instalada de la planta de producción para lograr tener la excelencia operacional en la cadena de suministro

Enfrentar um aumento repentino na demanda por componentes automotivos pode ser desafiador, mas é possível navegar por essa mudança com estratégias como avaliar rapidamente a capacidade de produção e estoque, priorizar os componentes mais demandados, colaborar com fornecedores, otimizar a cadeia de suprimentos, aumentar temporariamente a equipe e adaptar a linha de produção. Monitorar continuamente a demanda e produção, planejar estrategicamente e manter uma comunicação transparente com os clientes também são importantes para lidar eficazmente com o aumento da demanda.

Increasing in fixed assets tend to increase the cost since increasing the capacity need to be decided basis the demand surge in next 5 years . And initial cost will be high and to compensate that running cost need to be low . Demand prediction is a complicated process which will have forecasting factor which varies from industry to industry.

Before taking any active action, I would estimate the bullwhip effect. In my experience, I had a lot of situations where the growth in demand was inadequate, and in fact it was a consequence of the bullwhip effect. Unnecessary overproduction risks filling all warehouses and reducing company turnover. How did I manage bulwhip effect? Improving communication between manufacturers, customers and logistics; regular data sharing; visibility enhancement; using smaller order quantities if it’s possible (in particular levelled production); optimising logistics (in particular direct shipment to customers). All of these can help to reduce the impact of the bullwhip effect. But we must be prepared to face the reality that increased demand is true.

Advance technologies are expensive, lean manufacturing activities to identify bottle necks and solve quality issues from the root are always the first option, lean manufacturing principles like 5S (sort, set in order, shine, standardize, sustain) doesn’t need investment and are effective always, this should be your first approach if you want to increase your production.

Implementation of lean manufacturing processes is a constant growth process which enables the manufacturer to sustain the regular irregularities in the process and help to overcome them and also saving the cost .

When I was working in the plant, we had very close collaboration with our suppliers. Every day we had a daily production meeting to discuss our needs and to identify any potential challenges. By working together, we were able to avoid failures and maintain a high level of production output. Some of suppliers had access to FP modules like a viewer authority. Nevertheless Unnecessarily long communication channels should generally be avoided. Communicate directly with suppliers rather than repeating what someone else has said. Strong supplier relationships are essential for businesses that want to succeed during periods of high demand.

Inventory management play very crucial role in automotive industry since the production line tend to operate 24x7 due to which all the components which are required in the assembly need to be present at the time. To Manage the same effective ordering mechanism , Days of inventory (DOI) and Daily consumption play a vital role.Also Safety stock should be kept in mind in order to secure the production line to avoid line delays .

Effective inventory management during periods of high demand requires a proactive approach. Here's an example from my own experience: we were using inventory tracking systems. Real-time visibility into stock levels is essential for making informed decisions about reordering components. These systems help avoid stock shortages and ensure uninterrupted production. When demand for our products surged, we implemented replenishment system. By closely monitoring stock levels and coordinating with suppliers, we were able to reduce our inventory while maintaining the same level of production output.

I can't say I agree with this approach. JIT and demand surges do not mix. Absorbing variability in demand requires adequate inventory, and higher variability always equates to more inventory - not less. The goal here should be strategic inventory placement to decouple the supply chain. Placing inventory behind sources of variability will improve flow, and decrease lead times when disruptions occur.

Technology definitely provides a competitive edge in such situations be it the advanced planning systems providing scenario & what if analysis capabilities to identify & resolve gating components and constraints. Nowadays, it's more about supply chain orchestration platforms which brings various stakeholders in proper sync and in rhythm to address any business challenge. Also, enhanced degree of optimization remains an important area for supply planning specially when it comes to defining inventory norms, coverage profile etc.

From my experience I could say that looking at the figures of increased demand in the system is not enough. We have to understand the root cause of this phenomenon and vouch on their reliability. One time at work I faced with this situation from one of the overseas customer. Communicate directly was my strategy rather than complicated and long written official communication by emails. Videoconference and meetings memo by the end. This showed that the increased demand numbers were the result of a sudden promo activity that was not confirmed at all. To fulfill this demand before making additional production we reallocated stock to check if the promo works or not. As a result, it turned out that this was correct.

1 - Understand if the increase in demand is just a spike or a trend in the long term and if it is profitable 2 - If the increase is only for the short term and profitable, calculate the possibility to meet demand with stock + production and assess the impacts of meeting the demand 3 -If the increase is for the long term, build a Business Case and if it is profitable, align the increase of capacity with factories

If I am a supplier in good standing with the customer, my first inquiry back to them is to determine if this is a one time short lived spike in demand or a fundamental long term increase. A short period spike would probably tell me that a brief overtime increase would cover the need. A long term increase would probably require a much deeper dive into equipment, supply chain, personnel adds, etc.

Por mi experiencia opino que la gestión de la cadena de suministro es súper importante. Porque podemos adelantarnos a la demanda y tener todos nuestras materias primas y suministros en tiempo para cumplir con los requerimientos de los clientes