Framework for Leagile Supply Chain in the Auto Industry

Intaher Marcus Ambe

The global financial crisis has lead to increased pressure on automotive exec¬utives to make right decisions about their supply chain operations for competitive performance. Automakers today are faced with key supply chain issues which involve long order-to-delivery lead times and unreliable production schedules that have lead to excess inventory throughout the value chain. Lengthy demand planning cycles and lack of visibility to supplier, material, and production constraints have caused scheduling delays and short-term production changes. These problems drive automakers and suppliers to build up buffer inventory and limit their ability to flexibly react to changes in customer demand. Communication channels between original equipment manufacturers and other supply chain partners remains manual in many cases. The industry landscape is exposed to a set of critical challenges and trends that are leading and accelerating the need to fine-tune their supply chain strategies and operations. Therefore in a highly competitive environment such as today, an effective and efficient global supply chain strategy is a must for automotive manufacturers and their suppliers. The paper explores the concept of lean and agile supply chain strategies and presents a framework for implementing leagile supply chain as a possible strategy that could be applicable in the automobile industry in the current economic meltdown.