Boosting automotive supply chain efficiency

Innovations in vehicle manufacturing, design and engineering are rapidly changing the automotive industry. To keep pace with evolving technologies, traditional relationships between car manufacturers and suppliers are being redefined. New research at Northumbria University brings clarity to the complexity of the automotive supply chain, increasing operational efficiency and effectiveness.

Automotive supply chains have been going through a period of transformation in recent years. Driven by technological advances, suppliers are increasingly offering systems and design solutions and collaborating with car manufacturers to create innovative auto parts. These evolving relationships have significant implications to the traditional supply chain model. A full appreciation of this nuanced supply chain is vital for the effective management of organisational practices and procedures.

Dr David Bennett, Senior Lecturer, Newcastle Business School, Northumbria University, is leading advanced research into the automotive supply chain, examining the supplier level tiers and associated terminology. For over a decade, his pioneering work has informed major global car manufacturing organisations and academia of the importance of an explicit supplier tiered-structure positioning strategy. This latest research has been conducted in collaboration with Professor Dr Florian Klug (Munich University of Applied Science), Professor Dilek Demirbas (Istanbul University Business School) and Emma Dinsdale, Senior Controller (automotive manufacturing, UK).

The supply chain is traditionally defined into supplier tiers – 1, 2, 3 etc., however, they do not reflect the real-life complexities of these relationships. Different ranks of suppliers, for example, can be placed in the same tier, making it challenging for manufacturers to identify the superiority of the supplier and delegate appropriately. Previous research identified the limitations of the traditional model and introduced Tier 0.5 and Tier 0 to accurately reflect supply level intricacies. These additional tiers, however, have not been properly understood, until now.

Dr Bennett and his team’s extensive research into the working relationship between car manufacturers and their suppliers, as well as business excellence and trends in relation to synchronous supply in the UK automotive industry reveals the complexities of the tiering system. It provides a clear understanding of who leads and follows in the supply chain, essential as car producers continue to give greater responsibility to suppliers. Importantly, it reduces the possibility of production and supplier delivery errors through product supplier tiering ambiguity and misidentification. Car manufacturers, for instance, are now able to accurately identify the supplier position as Tier 0 or Tier 0.5, instead of previously all being placed Tier 1. 

The automotive industry is starting to benefit from the value of the new identification and position of Tier 0.5 and Tier 0. This improved understanding and awareness of nomenclature has had a significant impact on supply chain efficiency and effectiveness in the UK, Europe and the Far East, as well as the wider car industry.

Dr Bennett’s research into automotive systems is ongoing and in a further study he is collaborating with Warwick University Manufacturing Group (WMG) to explore UK car production operations management and organisational structuring with suppliers. For another project, Dr Bennett, has partnered with Istanbul University Business School to study continuous improvement in manufacturing operations management processes. This work has led to the book, Modern Kaizen Operational Practice in the Automotive Industry, published in April 2019.