Logistics for Global Automobile Manufacturing Industry

Abstract

The automotive industry is truly a global industry. Manufacturing plant of the company is set up in one corner of the earth, sourcing the automobile parts from many companies located all over the globes, and selling the final product in another country. This leads to complex supply chain. Production strategies like just-in-time (JIT) and just-in-sequence (JIS) creates testing times but presents opportunities for the logistics management. But currently, the industry is going through a rough phase. Manufacturing costs are increasing, rise in fuel prices is having its own affect on the industry, competitive landscape is changing, and globalization presents new political and economic challenges. Currently, the company needs to manage its supply chains efficiently, reduce cost and improve the accuracy of processes delivery. Today, the automobile industry is facing significant other challenges due to complex logistics. Logistics is about co-coordinating various activities like materials handling, storage, inventory management, freight transport and the related information flow and processing in a way that meets customer requirements at minimum cost. This paper will talk about the current challenges, opportunities, growth drivers and future strategies of the companies' logistics management. It will also cover how companies are adapting to the changing economic environment. The study is based on the qualitative analysis of secondary data. The challenges and opportunities for the companies exist from the current operations management and risks of globalization. Authors have looked at the challenges and opportunities in detail in this chapter. Improving the organization's performance and securing competitive advantage over others greatly depends on the supply chain management as it is seen that the competition is no longer between the organizations, rather they are amongst supply chains. From the research, it has been found that companies believe that for sustainable transportation and logistics, green supply chain is a must for long term sustainability of the company. Companies finds export compliance to the emerging markets as another major challenge. Transport and warehouse systems are, more or less, stabilized and companies are looking to get most out of them. Though there is connectivity between automobile companies and its suppliers but information is not available real time and hence it's difficult to collaborate. Visibility into logistics has come out as the biggest need for the companies.