September 1, 2023

Innovating the Road Ahead: Digital Trends Transforming the Automotive Supply Chain

Innovating the Road Ahead: Digital Trends Transforming the Automotive Supply Chain

Automotive vehicles are no longer mere metal on wheels; they have transformed into advanced, software-defined, GPU and chips-based, sensor-driven wheels—a transformation that will be propelled further with the adoption of electric vehicles (EVs), autonomous driving, and vehicle connectivity innovation. So, it is no wonder that these innovative technologies, which are expected to make the auto industry worth $300 billion by 2026[1], will also reshape its supply chains. 

With OEMs and their supplier base already grappling with pandemic-brought raw material and chip shortages and evolving compliance burdens, reworking their supply chain MRO to adapt to these evolving technological changes while streamlining their operations has never been more essential. In this article, we will delve into the exciting future trends expected to reshape the Indian automotive industry by driving growth and efficiency in their supply chain processes.

4 Trends Revolutionizing Automotive Supply Chain MRO

The automotive industry can build sustainable, intelligent, and resilient supply chains that deliver improved visibility and enable data-driven decision-making by incorporating the following changes in their supply chain management software.

1. Digital Procurement Solutions

Automotive players are integrating tech-enabled solutions involving automation, artificial intelligence (AI), and machine learning (ML) into their procurement platforms to optimize demand forecasting, process differentiation, supplier selection, and contract management. These B2B supply chain management solutions help reduce lead times, improve supplier relationship management and collaboration, and enable faster data-driven decision-making, creating a more agile and responsive supply chain.

2. Connected Factories 

In the Industry 4.0 era, the automotive industry has been turning to connected factories where production systems and manufacturing processes are interconnected through smart sensors and the Internet of Things (IoT). This enables the real-time generation, monitoring, and analysis of data that direct decisions regarding inventory levels, shifting production lines, and the prioritization of certain production runs. It also facilitates predictive maintenance, thus, minimizing downtime and improving supply chain MRO management.

3. Supply Chain Analytics 

Automotive companies lacking end-to-end digitalization suffer over 20-25% production delays due to supply shortages, compared to 10-15% for the advanced players.[2] By deploying advanced analytics tools, OEMs can process vast troves of data to gain valuable insights into demand patterns, potential production disruptions, operational costs, supply chain efficiency levels, and supplier performance.

4. Sustainability and Green Supply Chains

As automotive has a huge role to play in advancing India’s goal of achieving net zero emissions by 2070, efforts are being made to green the supply chains by implementing responsible procurement practices and reusing and recycling materials in vehicle manufacturing. The move to hybrid and electric vehicles is also aimed at achieving sustainability, requiring the redesign of traditional supply chains.

Driving Forward: The Future of Automotive Supply Chains

Automotive B2B supply chain management is undergoing a massive transformation driven by automation, AI/ML models, predictive analytics, connected factories, and more. Embracing these trends will enable automakers to foster more efficient, sustainable, resilient, and intelligent supply chains while incorporating consumer demand for more innovation, electrification, and sustainability. 

Moglix can enable you to achieve such transformations through its supply chain management software, as it has already done for a leading automotive OEM dealing with a fragmented supplier base, disintegrated procurement data, poor payment terms, and working capital mismanagement. Moglix’s one-stop procurement solution helped the OEM save 2.5% of its carrying costs by optimizing inventory management and consolidating its supplier base. Download the case study for finer details or learn more about Moglix’s supply chain MRO solutions.