Supply Management

Despite continued electric vehicle (EV) growth and adoption in Europe, United States automakers are taking a different path.

Just a year ago, the entire world was in full pursuit of moving to electric vehicles. Well, in the United States, at least, those times have changed. Pair rising inflation with the high price of EVs, and most economists would predict a slowing in EV customer demand. So, what would that slowdown mean to the automotive manufacturers and the entire EV supply chain?

At a high school science fair, a student proceeded to put five metronomes on a single piece of wood. As each metronome was started, the metronome needles bounced back and forth, independent of the others and definitely not in synch. “Behold,” the student said as she placed the platform of metronomes across two cylinders. Within a minute, all five metronomes followed the same tempo in complete synchronization.

By now, retailers have forecasted their revenue for the holiday season. Whether brick-and-mortar or selling wholly online, the supply chain process remains the same. They have found finished goods suppliers and placed orders that ensure they have the correct quantity of the right product at the right time. This is how business works…in retail. 

But what if you are upstream of this retailer buying frenzy? As a brand owner, the picture is quite similar, but it has been set in motion for some time now. The brand owner has already anticipated what orders they will receive from the retailer, and they have processed this forecast into a supply plan that allows them to build the finished goods in time for the shipment to retailers or on an even earlier timeline for businesses like distributors and other sales channels. 

While the goal of global sourcing and using outsourced manufacturing is to lower manufacturing costs, the increased complexity that comes from leveraging internal and external manufacturers brings significant challenges. Chief among these are the obstacles to managing visibility and control, obstacles that can negate financial benefits. For instance, when quality issues arise, the disconnected and far-flung nature of third-party manufacturing makes them hard to detect.