Megatrends affecting the automotive industry
Disruptive technology-driven trends are impacting the automotive industry and will continue to do so over the next few decades. Key trends include autonomous driving, connected cars, and electrification and these trends are not merely reshaping the automotive industry but actually fostering convergence of the automotive industry and the technology industry. At the same time, OEMs and industry suppliers are facing severe downward cost pressure.
Inventory cut by 25%, freeing $1 billion working capital
One of our automotive customers, a global tire manufacturer, was challenged by high supply chain costs and high inventory levels. To find the right solution, DHL Consulting started by defining the global supply chain vision – the aim was to move this customer’s supply chain from a ‘push’ system (where production would begin based on actual or forecasted demand) to a ‘pull’ system (by which orders would be triggered by inventory reaching a specified level).
During this project, the team used better customer segmentation and powerful forecasting tools to optimize the planning of demand and supply. Furthermore the team improved the logistics network by reducing distribution centers, optimizing product flows, and ensuring effective carrier management.
This global supply chain optimization initiative reduced the overall inventory level by an estimated 25%, freeing up as much as $1 billion working capital.