Dive Brief:
- Driverless cars, alternative sales methods and a trend towards disintermediation are among the automobile supply chain's greatest challenges, Advanced Manufacturing reports based on a recent SAP conference on automotive best practices.
- Software innovation and digitalization will level the playing field for auto manufacturers and suppliers, said an SAP executive vice president at a recent SAP conference on automotive best practices.
- Investing in connected systems and platforms to integrate shop-floor data with ERPs can add value throughout the supply chain by reducing operational costs.
Dive Insight:
Tesla is the automotive industry's Amazon: both companies are betting their success on a strong brand, a direct-to-consumer experience, and relying on as few intermediaries as possible.
As a result, if the parallel holds true for the automotive industry, the strategy of removing intermediaries threatens to disrupt the industry by severely reducing costs and increasing expectations.
OEM's would do well to begin investing in technologies to drive lean strategies, reduce operational costs, and help parent or partner companies compete. Advanced Manufacturing suggests lean strategies, software integration, and IoT investments can help accomplish this through more accurate and customizable data sets.
