Shortages, lack of transportation capacity and geopolitical conflicts pose challenges for supply chains in the automotive industry. Often, many of these hurdles appear at the same time and affect both automotive manufacturers and their suppliers. That being said, due to different sourcing strategies, not all businesses are affected equally by these geopolitical aspects.
Sharing data across the automotive industry to create transparency along the inbound supply chain helps businesses overcome these challenges. For instance, the use of various data sources can provide reliable information about developments in the end-to-end supply chain. Bottlenecks can be predicted more accurately by all stakeholders, and demand and capacity management can be adjusted appropriately. This makes supply chains more resilient and better prepared in the face of geopolitical crises, supply challenges and transportation disruptions.
Author
Jörg Biermann
Partner at
4flow consulting
The gap between expected potential and implementation
For this reason, more and more businesses in the automotive industry are recognizing the relevance and future potential of sharing data for greater transparency. Still, very few businesses share data with other industry players. For most businesses, the standardized exchange of data is limited to demand data, which is shared with direct suppliers. Additional, more detailed data are primarily shared only in crisis situations to overcome supply shortages. In most cases, data sharing is seen as only a temporary solution.
It is critical to close this gap between understanding the potential benefits of sharing data and actually putting it into practice. New OEMs and suppliers in the market show that data sharing can be profitable. These new market players are rethinking IT landscapes with a contemporary approach. Established players in automotive must start sharing their data with each other to a greater degree and develop new methods and structures to make use of the expected potential.
Trust as the basis for successful data exchange
Sharing sensitive data with other businesses requires trust on both sides. As a basis, guidelines and standards need to be established. Automotive businesses should create the necessary conditions now to make way for a trust-based relationship and profitable data sharing. Only then can they take advantage of the full potential offered by data transparency – and prepare their supply chains for future challenges.