Supply Network Globally Of Automotive Industry

The purpose of this report is to become familiar with research tools, to introduce a framework for secondary industry research and gain to practical experience in creating an executive summary. This research paper looks at a broad set of indicators on the Canadian new vehicle industries. The Canadian automotive industry produces light duty vehicles — cars, vans, pickup trucks; heavy duty vehicles—trucks, transit buses, school buses, military vehicles; and a wide range of parts, components, and systems used in vehicles of this nature. To complement its manufacturing activities, the industry boasts a well-developed vehicle dealer network, plus an aftermarket organization which has grown into a world-class distribution system and service provider (Canadian automotive industry, 2014). Canada accounts for a small amount of 4.6% of the Americas new cars market value (New Cars in Canada, 2016). Throughout the project I became more aware of how much the industry is worth. The worlds automotive industry accounts for around $1 trillion in annual sales. (Canada’s Auto and Auto Parts Industry Industrial Outlook, 2006). However, in 2015 the Canadian new cars market had total revenues of $15.0 billion. The market is expected to grow substantially by 18% in 2020 (New Cars in Canada, 2016).

The Ford Motor Company’s Supply Chain Management ABSTRACT The influx of foreign automobiles that flood the United States market is higher than ever before and American companies are struggling to adapt to this decrease in market share. Ford is one of the organizations that has restructured its supply chain strategy to better integrate suppliers into their system reducing cost and

The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.

In this world of technology and innovation even Ford Motor Company is investing in new technologies in order to improvised their supply chain management, build an environment with interaction between each department as well as suppliers in order to reduce the bridging gap between them. As it is a leader in auto market segment, needs to update and coop with time and technology periodically but due to huge competition from the Japanese auto makers like Toyota, Honda, and Nissan, Suzuki etc., who are strong and powerful with references to the supply chain process management due to which Ford market share dip compared to others as well as the sales also declined. During this time, Ford analysed the situation and thought positively and started improvement in the supply chain management.

While car manufacturing is a global industry, automotive companies such as JLR operate in broader regions such as Europe and Asia. Three major trends were identified affecting car production in mature markets, the first was the fragmentation of mature markets, customers were demanding more choice, and this has made it difficult for manufacturers to obtain economies of scale, so cost had to be reduced and with the general

Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This

Ford Motor Company has one of the most complex supply chain in the industry. Ford has achieved several of their goals by fostering long-term relationships with their suppliers through active

Moreover, as new platform hubs grow, foreign auto suppliers may build new plants in the U.S. to serve them. Nine out of 10 of the world’s largest automakers and 46 of the world’s top 50 global automotive suppliers have opened R&D facilities in Michigan alone.

The Global Purchasing and Supply Chain division was responsible for streamlining the supply chain and the year 2013 was a good one for the U.S. automotive market as sales rose 7.6 percent to 15.6 million vehicles. This is a substantial comeback from the levels of 2009-2010 when severe recession forced the bankruptcy of General Motors and other automobile companies and caused many other automakers to lose revenue and profits hence reducing labor and operation costs by massive worker layoffs and downsizing by closing manufacturing plants.

The second force on Porter’s Five Forces Model is supplier power. Supplier power is the “suppliers ability to influence the process they charge for supplies” (Baltza, 2015, p. 21). In many industries, supply power is one of the primary forces that that shape the competitive structure of the business (Wilkinson, 2014). However, supplier power is not as

A supplier group have even more power over an industry if it is dominated by a few companies, there are no substitute products, the industry is not an important consumer for the suppliers, their product is essential to the industry, the supplier differs costs, and forward integration potential of the supplier group exists. Labor supply can also influence the position of the suppliers. These factors are generally out of the control of the industry or company but strategy can alter the power of

The suppliers: Suppliers can be in charge of the accomplishment of the industry when they cling to the supremacy. The supplier embraces the influence when they are the no more than or the biggest supplier of their supplies as like BHA did.

With regard to the supply chain, manufacturing decades have shaped an ecosystem of vendors specialized by sector, forming different clusters throughout the entire country. Each cluster has very competitive costs through specialization because they can benefit from the scale established exploiting its capacity, its accumulated know-how and experience of its skilled workers. Clusters can also apply a business model based on a network of partners and / or interlinked competitors, which allows you to reconfigure the supply chain and that adjustments can be made quickly.

With an evolving and highly competitive market, firms are seeking more innovative ways to create value and improve efficiency. Historically firms have tried to improve internal processes through housekeeping but in the recent past this have changed and attention has centred on the management of the firm’s supply activities. Open markets and a “flat world “as Thomas Friedman (2005) explains, has seen many new entrepreneurs boom with business ideas that step aside the conventional methods of business. Reduced effort and time from conception till marketing, sales are now achieved at a much faster rate, achieved through technology advances and specialised suppliers. Developing relationships with such suppliers is now an integral part of the

The automotive supply chain needs to play a big role in this transition. Supply chain can help companies to get competitive advantage, which means going beyond meeting basic standards of performance such as connecting supply to demand at optimal costs.