| The automotive sector is considered to be the leader in both logistics industry and supply chain management. For companies working within this highly competitive sector, the need to stay one step ahead is essential to retain and gain market share, among which the most important component is the application of new technology within the supply chain structure and the implementation of collaborative working practices. As far as improving logistics efficiency and maximizing commercial benefits of logistics are concerned, new technologies are having a greater impact than ever before.The major obstacle in achieving full supply chain integration across supply chains is the unwillingness of different players in the industry to cooperate. Whilst many companies are unwilling to collaborate too closely for the fear of losing competitive advantage, in practice, greater collaboration results in greater cost savings, from the manufacturers to the suppliers. The development and implementation of effective supply chain management and strategic transport alliances will keep the automotive industry wheels moving.Today's automotive suppliers are confronted with numerous strategic challenges in the face of rapidly multiplying and changing business threats and opportunities.1 First, the Industry's continuing globalization raises a particular set of challenges for suppliers. Most immediately, globalization is leading the suppliers' traditional automaker customers to demand support for their own entry into new and emerging markets, requiring suppliers to add production capacity and/or adapt to new logistics challenges. Less immediately, but of potentially equivalent importance, the continuing entry of new automakers and their suppliers into China changes the competitive equation for the traditional suppliers. It brings the traditional suppliers new customer opportunities, but it poses new competitive threats as well, both in the form of direct competitors and indirectly through threats to its traditional customers.Second, the industry is restructuring, and virtually all suppliers will experience continual change in their specific roles and responsibilities, as the locations for executing various technical and managerial functions shift along the value chain. For example, some suppliers will face increased requirements to engineer their own parts and components andeven provide engineering support to their own suppliers. Almost all suppliers will experience heightened responsibility for the process engineering and manufacturing of their automotive products.The industry's increased globalization, combined with its altered responsibility structure, is driving a third important challenge, as suppliers and the manufacturers will inevitably develop quite different relationships as time passes. Some suppliers will find these relationships growing more balanced, as their increased responsibilities and the larger number of available customers makes them less dependent on any given manufacturers. Other suppliers will see their traditional relationships with the manufacturers essentially disappear, as system integrators or other suppliers replace their old manufacturer customers in the industry's more tiered structure.These three change challenges all intensify competition, forcing companies to alter their standard business operations, processes, and strategies as they pursue higher levels of internal performance and external coordination of their value chain. Meeting the demands of today's automotive industry will require most suppliers to make more and better use of information technology (IT), and the deployment of IT's constituent elements itself becomes a fourth fundamental and major challenge for the automotive suppliers.This article is organized as follows: Chapter I introduces the philosophies and concepts of supply chain management; Chapter II discusses the development of China's automotive industry; Chapter HI explores the supply chain process of automotive logistics; Chapter IV examines China's current automotiv... |
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