OEMs Confident They Can Overcome Supply Chain Issues

OEMs Confident They Can Overcome Supply Chain Issues

Time Stamp: September 6, 2023 2:48 PM
Source Node: 2256467

Original equipment manufacturers (OEMs) in the automotive sector are more confident that they’ll be able to address future supply chain disruptions, according to a recent survey.

In a report from Capgemini, almost two-thirds (61%) of senior automotive industry executives said that they have cut their backlogged orders by 61% while another 34% expect to reduce their backlogs over the next 12 months, based on a summary of the study by Repairer Driven News.

Automotive companies have recognized that building inventory is only a short-term solution to reducing their backlogs and that relying on working capital is a “risky strategy.” Instead, almost half of OEM respondents said that they are now working on implementing monitoring tools to help them greater understand the risks and constraints their organizations are subjected to.

Less than 40% of respondents (37%) said that they considered problems like carbon emissions and environmental risks when making supply chain decisions. OEM investment in supply chain sustainability appears to be around the same level as last year, but suppliers have reduced their annual investment by 17%.

Still, sustainability has some major benefits because over 56% of survey responders said their operational efficiency improved after they began recycling car parts.

“While sustainability and circularity are key components for building a more resilient supply chain and to future-proof operations, the scaling of circular-economy initiatives has been delayed due to a shortage of suppliers of recycled materials (and of the materials themselves),” Capgemini said in the report. “Automotive organizations need to balance sustainability and circular economy with factors like cost and affordability.”

Over 1,000 global automotive senior executives were interviewed for Capgemini’s survey.

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