Final Research Report Detailing 'E-Readiness of the Automotive Supply Chain' Unveiled Today at Auto-Tech 2001; Study authored by Center for Automotive Research and sponsored by SupplySolution Offers Projections on Supplier Consolidation and Recommendations
Final Research Report Detailing 'E-Readiness of the Automotive Supply Chain' Unveiled Today at Auto-Tech 2001; Study authored by Center for Automotive Research and sponsored by SupplySolution Offers Projections on Supplier Consolidation and Recommendations
SOUTHFIELD, Mich., Aug. 28 SupplySolution today introduced the final research report focused on assessing the North American automotive supplier sector's current and projected e-readiness. The findings of the study, authored by the Center for Automotive Research, and entitled "E-readiness of the Automotive Supply Chain - Just How Wired is the Supplier Sector?," indicate that 77 percent of Tier-1 automotive suppliers anticipate consolidation of their supplier base over the next year, and that e-business capability will be a driving factor in deciding supplier success. The final report provides an overview on the role of e-commerce in today's automotive industry, as well as details exactly why e-business has critical implications within automotive supply chains. To review a copy of final research report, send an email to kilbey@airfoilpr.com . Initial findings of the study were announced on Monday, August 6 in conjunction with a workshop held on the same subject at the 2001 Automotive Management Briefing Seminars in Traverse City, Mich. "With the recent wave of price cut demands coming from both the OEM and the Tier-1 automotive manufacturers, e-business has even greater ramifications to the industry," said Chris Moritz, President and CEO of SupplySolution. "Hosted supply chain applications can rapidly and effectively drive the cost savings and process improvements necessary for suppliers to remain competitive during this tumultuous economic time." SupplySolution is the leading provider of supply chain execution applications for manufacturing, distribution, exchange and supplier organizations. Typical results seen by SupplySolution customers, who include 10 of the Top 25 Tier-1 automotive suppliers, range from: 30% to 70% reductions in inventory, 50% to 90% reductions in premium freight costs and 40%-80% reduction in administrative tasks. Through SupplySolution's technologies, these types of savings within two months of implementation. SupplySolution commissioned the Center for Automotive Research to conduct the research study in January 2001. "These findings are important in validating the benefits provided by technology implementation. The data sheds light on the current state of the automotive industry, where its weaknesses lie, and where the industry as a whole needs to grow to adapt to emerging customer demands," commented Moritz. Additional findings from the research include: * Today, 15% of Tier-1 suppliers look for two-way e-business capability in their suppliers. This figure will rise to 77% within two to three years. * The importance of e-business will increase broadly across diverse business activities including demand, planning, management, engineering design and procurement. * E-business expenditures by Tier-1 companies will increase from approximately 3% of capital expenditures today, to 13% in the next 2-3 years. * Study participants also estimated the cost reduction impact of e- business in their organizations today, against when programs are fully implemented. In the category of engineering and product design, respondents indicated a 4% cost reduction today and when fully implemented 18%; for procurement a 7% reduction today and a 16% future reduction; with quality assurance, a 3% cost reduction today and a 19% reduction when e-business plans are fully implemented. * Tier-1 respondents, in assessing their suppliers' capability to manage e-business in specific manufacturing areas, ranked the "computer to computer communication - automated on both ends" the highest at 49%; logistics and order tracking at 18%; and finished goods inventory the lowest at 14%. * Assessing the future capability of the Tier-2 and Tier-3 supply base, the respondents projected increases of between 27-49% in the specific areas detailed above, within the next two to three years. "To succeed in the emerging business climate, e-business must permeate automotive supply chains," said Jonathon A. Morell, Ph.D., member of Environmental Research Institute of Michigan (ERIM)'s Center for Electronic Commerce, and one of the authors of the research project. "Tier-1 suppliers believe this is true, but are well aware of the problems that may thwart implementation. Success will depend on e-business models that work for all participants, and a vendor community that can provide the supporting technology and assistance." About the study "E-readiness of the Automotive Supply Chain - Just How Wired is the Supplier Sector?," was initiated in January 2001 by the Center for Automotive Research (CAR). The research comprised two steps; in the first, three automotive systems integrators were queried in focus groups; in the second, 16 Tier-1 suppliers with North American sales of $70.2 billion (average sales of $4.4 billion) responded to a comprehensive mail survey authored by Jonathon Morell, Sean McAlinden Ph.D., and Bernard Swiecki, of the Center for Automotive Research's team. About CAR and ERIM The Center for Automotive Research (CAR) was created in October 2000 at the Environmental Research Institute of Michigan (ERIM). Its purpose is to conduct research in significant issues related to the future direction of the global automotive industry and organize and conduct forums of value to the automotive community. About SupplySolution SupplySolution is a leading supply-chain execution company, delivering value to manufacturers, distributors, exchanges and suppliers through the implementation of collaborative supply chain applications, including the i- Supply Service, i-GetIt and the SupplySolution Global Infrastructure. Today, i-Supply is one of the most widely used real-time, direct-material fulfillment applications in the automotive industry, in operation at over 1,100 organizations. In March 2001, SupplySolution signed an exclusive automotive provider agreement with Covisint, providing automotive users availability to i-Supply(TM), co-branded as Covisint Fulfillment(TM), and all related infrastructure technologies, through the Covisint exchange. The company's technology headquarters are located in Santa Barbara, California, and its sales and service headquarters are located in Southfield, Michigan. i-Supply(TM) Service is a trademark of SupplySolution, Inc.
Click here |