For resilience, intelligence, connectedness, and sustainability TRANSFORMING THE AUTOMOTIVE INDUSTRY SUPPLY CHAIN 2TRANSFORMING THE AUTOMOTIVE INDUSTRY SUPPLY CHAINEXECUTIVE SUMMARYAutomotive industry supply chain disruption reveals its strategic role and the need for change Recent disruptions to the automotive industry and its environment are now leading to far-reaching changes throughout the supply chain, as well as to a better appreciation of its strategic importance. Relevant disruptions include:• Political and economic events during and after the pandemic. These are forcing companies to undertake rapid supply chain evolution to increase flexibility and optimize risk management.• Rapid regulatory change. A lack of visibility in the supply chain can hamper compliance with emerging ESG laws and guidelines.• New customer expectations that add further complexity. For example, customers now expect an omnichannel purchasing experience – making new demands on outbound logistics – and, once they’re using the car, want to buy new features as a service.• Far-reaching changes to the automotive business itself, such as new entrants and business models. Success with EVs and software-defined vehicles, for example, depends on forming the right supplier relationships.These disruptors have led automotive companies to reappraise their whole approach to the supply chain, with a better appreciation of its strategic role. They know that a small event somewhere in the supply chain can have a big impact on business growth and continuity, and that the right capabilities in this area can therefore confer a strategic competitive advantage.However, most automotive companies today feel that they are not yet fully equipped to seize thi...
