{"id":20891,"date":"2022-06-07T11:10:39","date_gmt":"2022-06-07T11:10:39","guid":{"rendered":"https:\/\/merlinsourcing.com\/?p=20891"},"modified":"2026-01-09T09:39:16","modified_gmt":"2026-01-09T09:39:16","slug":"procurement-in-automotive-industry-time-to-rethink-strategies","status":"publish","type":"post","link":"https:\/\/merlinsourcing.com\/de\/blog\/procurement-in-automotive-industry-time-to-rethink-strategies\/","title":{"rendered":"Procurement in Automotive Industry &#8211; Time to Rethink Strategies"},"content":{"rendered":"<p><span data-contrast=\"auto\">The automotive industry is the fourth largest in the world and is expected to reach nearly USD 9 trillion in revenue by 2030. The sector is no longer defined by conventional internal combustion engines. Automakers today are shifting towards advanced mobility solutions including electric, hybrid and hydrogen powertrains, autonomous systems, connected vehicles and sustainability-driven manufacturing.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">With thousands of components\u00a0required\u00a0to build a vehicle and a large share sourced externally, procurement in the automotive industry plays\u00a0a central role. The industry relies on vast global supply networks that have become increasingly vulnerable and complex.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Recent disruptions have hit automotive supply chains harder than most sectors. The war in Ukraine, the semiconductor crisis, COVID lockdowns,\u00a0Brexit\u00a0and tariff pressures exposed weak points across OEMs and tier suppliers. This article examines the current state of automotive procurement, the key\u00a0challenges\u00a0and the strategic actions\u00a0required\u00a0to strengthen sourcing resilience.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_61 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" >Inhaltsverzeichnis<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/merlinsourcing.com\/de\/blog\/procurement-in-automotive-industry-time-to-rethink-strategies\/#A_Glance_at_the_Major_Challenges_in_Automotive_Procurement\" title=\"A Glance at the Major Challenges in Automotive Procurement\u00a0\">A Glance at the Major Challenges in Automotive Procurement\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/merlinsourcing.com\/de\/blog\/procurement-in-automotive-industry-time-to-rethink-strategies\/#Best_Practices_to_Overcome_Challenges_in_Automotive_Procurement\" title=\"Best Practices to Overcome Challenges in Automotive Procurement\u00a0\">Best Practices to Overcome Challenges in Automotive Procurement\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/merlinsourcing.com\/de\/blog\/procurement-in-automotive-industry-time-to-rethink-strategies\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"h-a-glance-at-the-major-challenges-of-procurement-in-automotive-industry-today\"><span class=\"ez-toc-section\" id=\"A_Glance_at_the_Major_Challenges_in_Automotive_Procurement\"><\/span><strong><span class=\"TextRun Highlight SCXW101979889 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW101979889 BCX8\">A Glance at the Major Challenges in Automotive Procurement<\/span><\/span><span class=\"EOP SCXW101979889 BCX8\" data-ccp-props=\"{}\">\u00a0<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW111227485 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW111227485 BCX8\">Globalization and outsourced manufacturing have created highly fragmented supply chains. The recent geopolitical,\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW111227485 BCX8\">economic<\/span><span class=\"NormalTextRun SCXW111227485 BCX8\">\u00a0and operational disruptions have only amplified long-standing vulnerabilities.<\/span><\/span><span class=\"EOP SCXW111227485 BCX8\" data-ccp-props=\"{}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-1-ukraine-crisis-and-other-similar-geo-political-challenges\"><em>1. Ukraine Crisis and other Geo-Political Factors<\/em><\/h3>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"980\" height=\"400\" class=\"wp-image-20928\" src=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_05.png\" alt=\"Global auto sales have shrunk to 83.3 million from the previous expectation of 86 million units - Procurement in Automotive Industry\" srcset=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_05.png 980w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_05-300x122.png 300w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_05-768x313.png 768w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_05-16x7.png 16w\" sizes=\"(max-width: 980px) 100vw, 980px\" \/><\/figure>\r\n\r\n\r\n\r\n<p><span data-contrast=\"auto\">The invasion of Ukraine disrupted European automotive production with shortages of critical parts produced in the region. European\u00a0automakers\u00a0including BMW and\u00a0Volkswagen\u00a0experienced significant interruptions. The lost demand from Russia and Ukraine alone accounts for\u00a0nearly one\u00a0million vehicles for major automakers.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Global auto sales fell to 83.3 million units against an earlier expectation of 86 million.\u00a0Additional\u00a0pressures include inflation driven by rising crude oil and raw material prices and fears of global recession.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-2-covid-19-manufacturing-halts\"><em>2. <span class=\"TextRun Highlight SCXW100975110 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW100975110 BCX8\">COVID: A Global Manufacturing Slowdown<\/span><\/span><span class=\"EOP SCXW100975110 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span data-contrast=\"auto\">Border closures and national lockdowns halted production across OEM and supplier sites. Multiple plants were temporarily shut, leading to large layoffs. Nissan, for instance, closed two major facilities in Spain.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">Car production declined from 91.7 million units in 2019 to 77.6 million units in 2020, marking a 16 percent drop.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-3-the-semiconductor-crisis\"><em>3. <span class=\"TextRun Highlight SCXW20467202 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW20467202 BCX8\">Semiconductor Shortage<\/span><\/span><span class=\"EOP SCXW20467202 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"980\" height=\"400\" class=\"wp-image-20931\" src=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_03.png\" alt=\"SemiConductor crisis - Studies revealed that the global semiconductor supply- demand is rising by 17% per year as compared to a 6% p.a expansion in  production between the years 2020 and 2022\" srcset=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_03.png 980w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_03-300x122.png 300w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_03-768x313.png 768w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_additional-banners_03-16x7.png 16w\" sizes=\"(max-width: 980px) 100vw, 980px\" \/><\/figure>\r\n\r\n\r\n\r\n<p><span data-contrast=\"auto\">The semiconductor crisis continues to constrain automotive output. Legacy microcontrollers used extensively in vehicles represent about 40 percent of global demand.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">While semiconductor demand grew at 17 percent annually between 2020 and 2022, production capacity expanded only 6 percent yearly. This imbalance has extended the shortage far beyond\u00a0initial\u00a0expectations.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-4-automobile-manufacturers-betting-heavily-on-electric-vehicles-and-batteries\"><em>4. <span class=\"TextRun Highlight SCXW92636791 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW92636791 BCX8\">Accelerated Shift to Electric Vehicles<\/span><\/span><span class=\"EOP SCXW92636791 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW239442029 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW239442029 BCX8\">Automakers are investing heavily in electric vehicles and battery technologies. Companies without a clear EV roadmap face strategic disadvantages as supply chains shift to new materials, battery\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW239442029 BCX8\">chemistries<\/span><span class=\"NormalTextRun SCXW239442029 BCX8\">\u00a0and specialized suppliers.<\/span><\/span><span class=\"EOP SCXW239442029 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-5-liquidity-challenges\"><em>5. Liquidity Challenges<\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW148691801 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW148691801 BCX8\">OEMs and suppliers have been under liquidity pressure due to plant shutdowns and reduced sales. Many continue to\u00a0<\/span><span class=\"NormalTextRun SCXW148691801 BCX8\">operate<\/span><span class=\"NormalTextRun SCXW148691801 BCX8\">\u00a0with limited cash reserves, affecting investments, production\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW148691801 BCX8\">planning<\/span><span class=\"NormalTextRun SCXW148691801 BCX8\">\u00a0and supplier payments.<\/span><\/span><span class=\"EOP SCXW148691801 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n<h3 id=\"h-5-liquidity-challenges\"><em><span class=\"TextRun Highlight SCXW102357942 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW102357942 BCX8\">6. Long Standing Operational Issues<\/span><\/span><span class=\"EOP SCXW102357942 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n<p>\r\n\r\n<\/p>\r\n<p><span class=\"TextRun Highlight SCXW12954648 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW12954648 BCX8\">Persistent challenges such as inventory management,\u00a0<\/span><span class=\"NormalTextRun SCXW12954648 BCX8\">logistics<\/span><span class=\"NormalTextRun SCXW12954648 BCX8\">\u00a0coordination and product recalls continue to strain procurement teams already dealing with heightened unpredictability.<\/span><\/span><span class=\"EOP SCXW12954648 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-what-are-the-best-practices-to-overcome-challenges-faced-in-procurement-for-automotive-industry\"><span class=\"ez-toc-section\" id=\"Best_Practices_to_Overcome_Challenges_in_Automotive_Procurement\"><\/span><em><strong><span class=\"TextRun Highlight SCXW125684320 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW125684320 BCX8\">Best Practices to Overcome Challenges in Automotive Procurement<\/span><\/span><span class=\"EOP SCXW125684320 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/strong><\/em><span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW144876555 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW144876555 BCX8\">Procurement plays a pivotal role in helping automotive organizations regain stability and competitiveness. Below are the strategies that sourcing teams need to prioritize.<\/span><\/span><span class=\"EOP SCXW144876555 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-1-from-global-to-local\"><em>1. Shifting from Global to Local<\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW191351482 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW191351482 BCX8\">Automotive supply chains traditionally\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW191351482 BCX8\">favored<\/span><span class=\"NormalTextRun SCXW191351482 BCX8\">\u00a0global sourcing to\u00a0<\/span><span class=\"NormalTextRun SCXW191351482 BCX8\">leverage<\/span><span class=\"NormalTextRun SCXW191351482 BCX8\">\u00a0low manufacturing and labor costs. The pandemic showed the fragility of this approach. OEMs and suppliers are now\u00a0<\/span><span class=\"NormalTextRun SCXW191351482 BCX8\">rebalancing towards<\/span><span class=\"NormalTextRun SCXW191351482 BCX8\">\u00a0regional and local supplier ecosystems to improve agility and reduce geopolitical risk. Supplier diversity and nearshoring strategies are becoming essential components of procurement planning.<\/span><\/span><span class=\"EOP SCXW191351482 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-2-modifying-the-just-in-time-jit-model\"><em>2. <span class=\"TextRun Highlight SCXW186780128 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW186780128 BCX8\">Rethinking the Just\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW186780128 BCX8\">In<\/span><span class=\"NormalTextRun SCXW186780128 BCX8\">\u00a0Time Model<\/span><\/span><span class=\"EOP SCXW186780128 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW211740079 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW211740079 BCX8\">The Just\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW211740079 BCX8\">In<\/span><span class=\"NormalTextRun SCXW211740079 BCX8\">\u00a0Time model, designed to minimize inventory, struggled during the pandemic when supply lines failed. Automotive companies are now building buffer stock for critical parts, adopting hybrid inventory\u00a0<\/span><span class=\"NormalTextRun SCXW211740079 BCX8\">strategies<\/span><span class=\"NormalTextRun SCXW211740079 BCX8\">\u00a0and strengthening safety stock policies to enhance resilience.<\/span><\/span><span class=\"EOP SCXW211740079 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-3-enhancing-supplier-collaboration-and-co-innovation\"><em>3. <span class=\"TextRun Highlight SCXW69123775 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW69123775 BCX8\">Strengthening Supplier Collaboration and Co Innovation<\/span><\/span><span class=\"EOP SCXW69123775 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW41664415 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW41664415 BCX8\">Innovation in the automotive sector increasingly depends on collaboration with strategic suppliers. Engaging suppliers early in the product development cycle helps accelerate innovation, reduce\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW41664415 BCX8\">costs<\/span><span class=\"NormalTextRun SCXW41664415 BCX8\">\u00a0and improve quality. Co engineering models allow suppliers to play an active role in design, material\u00a0<\/span><span class=\"NormalTextRun SCXW41664415 BCX8\">selection<\/span><span class=\"NormalTextRun SCXW41664415 BCX8\">\u00a0and performance improvement.<\/span><\/span><span class=\"EOP SCXW41664415 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-4-emphasizing-on-cost-efficiency-in-the-long-run\"><em>4. <span class=\"TextRun Highlight SCXW32296201 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW32296201 BCX8\">Exploring Long Term Cost Efficiency Models<\/span><\/span><span class=\"EOP SCXW32296201 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW241812957 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW241812957 BCX8\">Shipping\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW241812957 BCX8\">vehicles<\/span><span class=\"NormalTextRun SCXW241812957 BCX8\">\u00a0as Semi Knocked Down, Completely Knocked Down or Built Up for export is widely adopted to manage cost advantages and navigate trade requirements. Procurement teams should evaluate business cases for such models while balancing them with changing trade rules and local market considerations.<\/span><\/span><span class=\"EOP SCXW241812957 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-5-utilizing-technology-to-enhance-the-process-of-procurement-in-automotive-industry\"><em>5. <span class=\"TextRun Highlight SCXW132966054 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW132966054 BCX8\">Leveraging Technology for Procurement Excellence<\/span><\/span><span class=\"EOP SCXW132966054 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW193963384 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW193963384 BCX8\">Digital procurement is no longer optional. Advanced analytics, artificial intelligence,\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW193963384 BCX8\">cloud based<\/span><span class=\"NormalTextRun SCXW193963384 BCX8\">\u00a0procurement solutions, automation and supplier collaboration platforms help streamline sourcing workflows, improve\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW193963384 BCX8\">transparency<\/span><span class=\"NormalTextRun SCXW193963384 BCX8\">\u00a0and\u00a0<\/span><span class=\"NormalTextRun SCXW193963384 BCX8\">identify<\/span><span class=\"NormalTextRun SCXW193963384 BCX8\">\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW193963384 BCX8\">cost saving<\/span><span class=\"NormalTextRun SCXW193963384 BCX8\">\u00a0opportunities. These technologies also make it easier to detect risks and bottlenecks hidden within complex supply chain data.<\/span><\/span><span class=\"EOP SCXW193963384 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-6-adopting-risk-mitigation-strategies-for-the-procurement-in-automotive-industry\"><em>6. <span class=\"TextRun Highlight SCXW239007995 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW239007995 BCX8\">Prioritizing Risk Management<\/span><\/span><span class=\"EOP SCXW239007995 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/em><\/h3>\r\n\r\n\r\n\r\n<p><span class=\"TextRun Highlight SCXW163349974 BCX8\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW163349974 BCX8\">Automotive organizations must embed risk assessment and mitigation into daily operations. Beyond evaluating suppliers individually, sourcing teams must adopt a broader view of\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW163349974 BCX8\">multi tier<\/span><span class=\"NormalTextRun SCXW163349974 BCX8\">\u00a0supply chain risks. Regular scenario planning, risk\u00a0<\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW163349974 BCX8\">scoring<\/span><span class=\"NormalTextRun SCXW163349974 BCX8\">\u00a0and real time monitoring help companies respond faster during disruptions.<\/span><\/span><span class=\"EOP SCXW163349974 BCX8\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:720,&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n\r\n\r\n\r\n<p><span data-contrast=\"auto\">The automotive industry was among the hardest hit by the pandemic, with manufacturing and sales declining globally. While recovery is underway, the shift towards connected, electric, autonomous and\u00a0mobility based\u00a0ecosystems is reshaping supply chain expectations.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/p>\r\n<p><span data-contrast=\"auto\">\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"536\" class=\"wp-image-20933\" src=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic-1024x536.png\" alt=\"Four key focus areas for  procurement processes in automotive sector\" srcset=\"https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic-1024x536.png 1024w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic-300x157.png 300w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic-768x402.png 768w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic-16x8.png 16w, https:\/\/merlinsourcing.com\/wp-content\/uploads\/2022\/06\/automotive_infographic.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\r\n\r\n\r\n\r\n<p><span data-contrast=\"auto\">To build resilience, automotive procurement teams must focus on four key areas:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/p>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"25\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"auto\">Adopting digital technology and analytics<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"25\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"auto\">Strengthening supplier collaboration<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"25\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"auto\">Encouraging organization wide technology adoption<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"25\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span data-contrast=\"auto\">Embedding proactive risk management<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<p><span data-contrast=\"auto\">These strategic actions will help automotive companies reposition their procurement function for a more agile, competitive, and\u00a0disruption-ready\u00a0future.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;335559685&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0}\">\u00a0<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>Drive success with Direct Material Sourcing for automotive procurement challenges, enhance Supplier Collaboration and Manage Risks.<\/p>","protected":false},"author":1,"featured_media":20926,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[108,1,19,20,18],"tags":[113,35,30,36],"class_list":["post-20891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-automotive-industry","category-merlin","category-procurement-analytics","category-procurement-and-sourcing","category-strategic-sourcing","tag-automotive-companies","tag-procurement-analytics","tag-procurement-solution","tag-procurement-solutions","entry"],"yoast_head":"<!-- This site is optimized with 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