supplier management directed parts automotive industry

Article

Sub-supplier Management

Directed Parts in the Automotive Industry

The professional management of directed parts enables stable and efficient automotive supply chains. Defining sourcing processes as well as clear roles and responsibilities allows for the effective coordination of all parties involved.

Even though, our research provides evidence that an active management of directed parts is lacking and that the visibility along the n-tier supply chain is still too limited.

Study context

Currently, the topic of supplier management is being widely discussed in the automotive industry but corresponding supply chain concepts or innovative solutions for an optimal visibility and performance are often lacking.

In this study, we collected the insights of 108 experts, mainly in the areas of product development and procurement and logistics with regard to directed parts and the management of n-tier suppliers in the automotive industry.

The survey was rolled out by Deloitte Germany on a global scale with support from Deloitte US. In order to obtain a full picture of the current state, we included participants along the whole supply chain, ranging from major OEMs to smaller companies at lower n-tier levels.

The report covers the following aspects:

  • The current state of the management and handling of sub-suppliers and directed parts
  • Major challenges for OEMs and suppliers
  • Leading solutions handling directed parts including business models with roles and responsibilities
  • Action measures and recommendations

Sub-supplier Management: Directed Parts in the Automotive Industry

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Insights

The results of the study confirmed our insights that collected from our clients projects and provide evidence that the importance of sub-supplier management and directed parts is increasing. At the same time, OEMs are currently lacking an appropriate management and established processes for a flexible shifting between different business process models.

Our research indicates that there are to a large extent no standardized processes for directed parts and that the visibility along the n-tier supply chain is still too limited, considering today’s supply chain risks and the challenging delivery conditions for suppliers to deliver high-quality parts just-in- time.

We can recommend that awarding parties of directed parts such as OEMs establish a formalized and standardized process for the directed part decision process. This process has to be installed within the product development and procurement departments, also considering periodic review cycles for relevant parts or commodities.

In summary, if OEMs want a robust supply chain and more influence on the end product, its overall quality and delivery time, they have to invest in coordination and collaboration with their n-tier suppliers.

Tino Krüger, Director Technology

For further insights, e.g. on major saving potentials and other benefits in terms of reduced risk and improved revenues for both OEMs and suppliers, please see our study.