Mergers of suppliers consolidate auto value chain

Worldwide
Published:  14 October, 2015

As a series of large-scale mergers and acquisitions of Tier suppliers take place, the global automotive industry gradually restructures its hierarchy. Rather than continuing with existing supply patterns, opportunities exist for vehicle manufacturers to review and streamline supply chain operations. 

According to Evolution Time Critical, a leading specialist in emergency logistics for the automotive industry, improvements in operational efficiency, supply chain visibility and the level of in-built contingency can be achieved by maximising the opportunity provided by tightened supply chain control.

“The acquisitions and mergers of Tier suppliers has the effect of consolidating the supply chain, which provides OEMs and their suppliers with a greater operational visibility and, therefore, enhanced control over the flow of parts, quality and lead-times,” explained Brad Brennan, Managing Director of Evolution Time Critical.

“Larger suppliers become more powerful as they increase in size and potentially broaden their vehicle manufacturer client base, and a new opportunity is created for smaller suppliers subjected to buy-outs”, he added.

As supply chain consolidation improves the flow of information between OEMs and suppliers, it provides an enormous benefit for vehicle manufacturers, who can then focus on supplier business, align lead times and schedules in an effort to streamline and protect supply processes.

The potential for greater understanding and transparency also provides an opportunity to further develop proactive contingency plans that can safeguard operations. 

Emergency logistics plays an integral role in lean strategies as it allows for further inventory reductions while maintaining the reliability of deliveries to manufacturing plants. The expertise and techniques developed by Evolution for the automotive sector are also benefitting the aerospace and marine industries, where the company helps clients to release capital trapped in spare parts by facilitating urgent parts deliveries, and return aircraft and ships to service more quickly.

The skills of Evolution’s team are also available for consulting projects, helping clients to achieve additional savings in their supply chains while also strengthening and improving manufacturing efficiency

Find out more: www.evolution-timecritical.com

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