AUTOMOTIVE SUPPLY CHAIN - ISSUES FOR SMEs

B. Shirvani, J. Griffiths

University of Central England, UK

The scope and boundaries of companies in the automotive industry will be subjected to increasing change over the next ten years. With over-capacity of more than two million vehicles in Europe alone Original Equuipment Manufactures are under increasing pressure to make to order and yet satisfy customers in terms of delight, variety and avalibility. On way of doing this is by removing complexity from their business dwon to their suppliers. This will mean fewer first tier companies working far more closely in some form of partnership with the QEMs. They will become system rather than just product suppliers and will take on far of take-overs and joint ventures as companies reposition or reconfigure themselves to take advantage of new opportunities. These new companies or consortia in turn will have difficulty in dealing with 'out-sourced' complexity. The will also seek to reduce this complexity down to their supplies. This however is not so easy. The majority of these UK sheet metal component suppliers are small in size and have found it difficult to take advantage of new technologies and innovations. While there is still a demand for their products, this may not be sufficient for a number of them to retain their supply chain positions in the future. The paper reports on the current state of automotive supply chains and the impact that changes in structure and operations are having on sheet metal companies. It argues that all Small and Medium Enterprises will need to reassess their own manufacturing and chain positons and roles. There are indeed many threats facing such companies, but there is opportunity as well for those who can manage such changes effectively.

Keywords: SMEs,supply chain, automotive, global sourcing