Converging Sourcing Solutions for the Automotive Industry (EX)
Sourcing solutions in the automotive industry are characterized by a diversity of implementation approaches. Automotive OEMs focus mostly on the capabilities that provide decision support for parts reuse and product content management, while Tier One and Tier Two suppliers maintain a stronger focus on automating the sourcing process. Both groups share a goal of better controlling the program cost drivers and integrating warranty management with contract management activities. but neither group has developed significant synergies between engineering and procurement organizations. But, pressure is mounting to change current practices. The dominant direction for change is toward linking activities in procurement and product development and in sharing overall program objectives among all value chain constituents. New Internet interoperability and collaborative protocol advances spur the progress of the value chain convergence approach, which is a viable alternative to the point solution integration approaches available from PDM, ERP, and e-sourcing vendors. Two critical issues currently surround sourcing solutions in the automotive industry: a) The automotive industry has not built up maturity in its use of advanced technology solutions. b) Sourcing solutions are expected to integrate with engineering, commercial, and operations management systems in order to provide uncluttered work environments for all parties involved in sourcing.
Keywords: Agile, Automotive industry, Convergence approach, i2, Matrix, OEMs, Outsourcing, Process automation,Sourcing solutions, Supply chain, Tier One, Tier Two suppliers, Time-to-market