Let’s get straight to the point: As an OEM or supplier, can you respond proactively and promptly to disruptions along the supply chain? How do you fulfill the responsibilities on your company, and in particular your technical systems, resulting from e.g. the Supply Chain Due Diligence Act or carbon accounting requirements? It’s not a simple matter: when supply chains have hundreds of participants, it is difficult to get the information you need. In my opinion, this is where industry-wide data ecosystems are the key to unlocking clarity!
For many industries, designing flexible and resilient supply chains is one of the greatest challenges. This is particularly the case in the automotive industry. Making the switch to the development and manufacturing of e-vehicles presents enormous challenges for the entire automotive industry – OEMs and suppliers alike. Now, geopolitical tensions are adding a further disruptive influence. Supply bottlenecks are leading to a fall in car sales. According to the European industry association ACEA, 20 percent fewer cars reached the road during March 2022 in the EU than one year earlier. As one of the most important components of a car, computer chips in particular are in short supply. More recently, there have also been shortages in other components, such as wiring harnesses or raw materials including nickel and neon. The result: According to the data and information service IHS Markit, supplier delivery times have never been as drawn out as they are now. Waiting times to buy some models have increased to 12 months, especially for electric vehicles.
When it comes to unexpected or short-term events causing supply bottlenecks, manufacturers’ previous supply chain strategy is reaching its limits. While closely synchronized, highly-efficient supply networks have reduced the cost of vehicle production, it had a disadvantage too: it drastically reduced flexibility. Stock is kept as low as possible, and production is limited to just-in-time and just-in-sequence. Suppliers produce some components in advance so an increase in orders at short notice does not lead to supply bottlenecks, but not enough to be fully resilient to unplanned events. Limited integration of local production facilities and regional diversification have also proved barely adequate for this kind of challenge. It is now time to bring greater transparency into our supply networks, so all participants who are dependent on one another are optimally informed of the current situation and are able to act accordingly in plenty of time.
Problems can never be solved using the same mindset that created them.
Catena-X is a network that stands for data sovereignty while maintaining provider and technology openness. T-Systems is an important technology partner for this secure data ecosystem.
Tim Höttges, CEO Deutsche Telekom