Revolutionizing the Automotive Supply Chain: Harnessing the Power of On-Demand Talent

The ongoing financial pressures caused by inflation and the increasing cost of capital are compelling businesses to implement exceptional measures to improve operational efficiency, surpassing the levels seen before the COVID-19 pandemic, in order to reverse the trend of declining margins.

Supply chain disruptions have transitioned from a lack of components and raw materials to financial disruptions and inflation. Companies are now required to allocate additional resources to mitigate risks not only within their own operations, but also further down the supplier tiers.

Demands for sustainability from regulatory bodies and customers are once again adding to the workload of companies, and we are only in the early stages of this journey. The demand for new technologies, ideas, and their implementation is increasing. Finding a solution to delivering financial benefits while achieving sustainability targets requires significant effort and potentially new skill sets.

The challenge of finding and retaining talent is a widespread issue in Europe. Nearly every company is struggling to attract new employees for almost all positions. Implementing bold solutions and different approaches to mitigate these challenges will require extra efforts from leadership teams, who are finding it difficult to cope with the current staffing shortages.

As supply chains become more complex, traditional hiring models may be unable to keep pace with the demand for specialized skills and rapid adaptation. To address this issue, there is a transformative approach called On-Demand Talent that offers unparalleled benefits to the automotive supply chain.

On-demand talent is a paradigm shift that refers to hiring skilled professionals on a project basis, as and when needed. This approach has gained significant traction across various industries, including automotive, due to its ability to address several key challenges facing traditional employment models.

One primary advantage of leveraging On-Demand Talent in the automotive supply chain is its capacity for agility. According to a recent study by McKinsey & Company, 72% of automotive executives agree that agility is the key to gaining a competitive edge in today's market. Furthermore, Deloitte's global industry CPO survey revealed that companies that outperform their competitors, among other elements, favor using On-Demand talent to augment their existing teams.

The chart below illustrates the variance in resource management approaches used by the companies we refer to as Orchestrators of Value. These teams are highly integrated into the business and consistently perform in the top quartile of all survey participants. Orchestrators of Value source capabilities more widely.

Starting from the bottom of the chart, it's evident that Orchestrators of Value generally rely less on hiring full-time staff, at 72%, compared to the group of Followers/Average, at 88%. There's not a significant difference in the utilization of traditional consulting teams between the groups.

However, there are substantial differences in the deployment of internal resources in an Agile project fashion and the use of On-Demand Talent and Expertise between the Orchestrators of Value and the Follower companies.They look to access a greater pool of talent and expertise in the first instance, not only by leveraging traditional talent models (think core hiring and contractors—interestingly at similar levels to others), but also by turning to outsourcing, hybrid managed services, and other types of open talent models to get what they need at twice the rate that Followers do. Not only does this help them close capability gaps, but it can come with the added advantage of optimizing for demand fluctuations, quality, and cost. Establishing this takes more upfront design work, but it ultimately gives them an instant advantage in the war on talents.

As fewer organizations engage in work-based solutions, those that can effectively manage work-based and talent-based approaches are better positioned to gain a competitive advantage in the automotive industry.

At Deloitte CE, we provide practical, efficient, and result-oriented support to the automotive industry. Our Automotive Taskforce is a team of highly skilled practitioners with extensive experience in the automotive industry. Combining their expertise with standardized, well-proven work methods has resulted in the creation of a unique service that takes on-demand talent to the next level.

The Automotive Taskforce offers a pool of versatile and highly skilled on-demand talent. Using well-proven methods, we address frequent issues in the automotive supply chain and save companies valuable time and resources. This approach almost eliminates the need for training and allows us to adapt resources to each organization's unique needs.

Our team has successfully assisted OEMs and Tier 1 automotive companies in resolving complex challenges, such as launch issues, delivery disruptions, crisis leadership responses, and others.The technology specialist team, in collaboration with the local team and the lower-tier supplier, developed the necessary technology change to address the issue causing lower output than demand. This approach allowed our client to prioritize their other customers and ensure timely deliveries. The Deloitte Taskforce prevented overloading the on-site teams by deploying most of the team members to address the urgent issue.The Automotive Taskforce provides access to diverse expertise, including automotive production engineering, supply chain management logistics, project and launch management, and more. This diversity fosters innovation and enables companies to tackle complex challenges with a multidisciplinary approach.

Our experts bring vast amounts of knowledge and best practices from their experience, enabling our clients to realize substantial benefits quickly after the project starts. On-demand talent provides cost efficiencies for automotive companies by reducing overhead costs associated with traditional hiring processes, including recruitment fees, salaries, benefits, and training expenses. In contrast, engaging freelancers allows companies to pay for specific project milestones or deliverables, optimizing resource allocation and reducing fixed costs. According to a Deloitte study, companies can save up to 30% on labor costs by utilizing On-Demand Talent.

On-demand taalent also enables automotive companies to access a regional talent pool throughout Europe. 

In conclusion, on-demand talent represents a paradigm shift in the automotive supply chain, offering unparalleled benefits in agility, expertise, cost efficiency, and global reach. By embracing this innovative approach, automotive companies can position themselves for success in an increasingly competitive and dynamic market landscape.

References:

• Deloitte (2024) “Global Human Capital Trends – Thriving Beyond Boundaries”
• Deloitte. (2023). “Global Human Capital Trends.”
• Deloitte (2023) Global Chief Procurement Officer (CPO) Survey
• McKinsey & Company. (2023). “Agility in Automotive: Key to Competitive Advantage.”