Accelerating supply chain planning in the automotive industry

April 28, 2022 | 3 minute read
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By Chetan Kulkarni, Dharmesh Lal, and Abhishek Mishra, Trinamix

Rocky roads or smooth sailing? Amid ongoing supply chain disruptions, automotive aftermarket suppliers are operating under a new set of rules.

The aftermarket supply chain sometimes struggles to manage a variety of parts, varying demand patterns, large numbers of vendors, inefficient legacy systems, and third parties to coordinate effective distribution. Some trends reshaping planning in the automotive supply chain include:

  • Long product support with a baseline forecast for demand profiling, based on a seasonal/non-seasonal item across the network
  • Introduction of new product categories to support vehicle electrification, connectivity, and autonomy
  • Fast innovators bringing products to market quickly and proactively to balance product flow and costs throughout a product’s life cycle
  • The need for better forecast accuracy to identify customer order trends and improve near-term forecasting
  • Improved upstream supply chain processes that improve supplier qualification / reduce supplier variability

For example, one of our clients is a leading supplier of auto glass and shop accessories with more than 100 distribution branches in North America. Until recently, they relied on a legacy Manugistics planning system for forecasting and replenishment planning. With a heavily customized solution, they faced limited scalability to support their supply chain planning process across 180 distribution centers.

With legacy, on-premises supply chain technologies, they often got stuck in a business model that costs them more over the long term and doesn’t scale according to their needs. And without a common supply chain data structure, they find it challenging to aggregate data from numerous sources. Failure to anticipate surges in their customer demand leads to an undersupply or oversupply of inventory, ultimately impacting their return on investment (ROI). 

To gain more predictability in the supply chain and enhance the overall replenishment planning process, they required a single solution for both demand management and supply planning—so they selected Oracle Fusion Cloud Supply Chain Planning.

Biggest supply chain challenges

Our client faced numerous challenges due to evolving customer expectations, acceleration of technological innovation, and shifts in the competitive landscape. Among the challenges that automobile manufacturers often face:

  • Increased marginal erosion and procurement challenges due to high logistics and inventory costs, insufficient warehouse management, and counterfeiting of parts
  • Lack of sustainable business models affecting decision-making processes, hindering end-to-end supply chain visibility, and impacting forecasting capabilities
  • Increased dependency on outsourced logistics operations, leading to lack of control, breaches of confidentiality, over-reliance on 3rd-party services, and lowering of standards
  • Poor inventory control, leading to shortages or overstocking
  • Insufficient data management, inadequate Key Performance Indicators (KPIs) for benchmarking, and poor demand forecasting due to the absence of data on the stock turn, sell-through, historical sales, promotions, and seasonal variation
  • Legacy and disconnected systems that operate in silos, resulting in poor tracking of inventory quantities, mistaken orders, and missing transparency between departments
  • Small teams of planners managing high volumes of data, hampering their ability to make the best planning decisions

How do Oracle’s supply chain planning solutions help overcome supply chain disruptions?

One of the most difficult challenges that automotive supply chain executives face regularly is sensing demand and responding at the right time. Oracle Fusion Cloud Supply Planning helps companies plan, monitor, and respond to near-term market changes. It balances supply with demand, seamlessly integrates with external systems allowing safety stock-based planning, and provides simpler management of long lead time vendors.

Trinamix Distribution Workbench integrates with Oracle Supply Planning, allowing planners to consolidate planned orders based on vendor constraints. This maximizes the use of resources and helps leverage the best source of materials and components.​ Supply chain executives can easily optimize logistics costs through advanced container consolidation and dual sourcing.

With Oracle Fusion Cloud Demand Management, aftermarket suppliers can accurately forecast customer demands and collaborate across the supply chain. By getting baseline statistical forecasts of all parts based on average sales, they can make smarter decisions for their products. KPIs and reporting give better insight into profitability drivers and help analyze historical demand trends.

To truly accelerate supply chain planning, both demand and supply must be considered as equally important and work together as a single solution that ensures efficient service delivery.

Learn more about Oracle Cloud Supply Chain Planning.

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