Don't underestimate the importance of the automotive supply chain

Building resilience in the supply chain will be one of the key drivers for the future success in the automotive sector, says Sarah Riding at the Birmingham office of Irwin Mitchell.

Over the last couple of decades the UK automotive sector has changed immeasurably. We have moved from an era of rapid decline in outputs to a reinvigorated sector with renewed growth at all tiers and strengthened supply chain resilience.

We have partnered with clients to move traditional manufacturing into hi-tech, IP driven businesses adopting advanced manufacturing techniques across the automotive sector and helping them achieve competitive advantage and their growth ambitions.

One of the key issues continues to be building resilience in the automotive supply chain. Supply chains in the sector have come under increasing pressure in recent times with the unstable economic climate. Supply chains are now more sophisticated and highly integrated and a failure at any level can seriously impact the rest of the chain.

Our commercial and sourcing team regularly advise on both sourcing strategy and backshoring arrangements within the sector. The trend within the automotive sector has tilted more and more towards reshoring as organisation’s focus more on quality, lead times and innovation.

The advantage gained by reducing the time from design to production and the intangible benefit of the supply chain being close by has resulted in a huge change in focus from the offshoring of recent years to local supply chains flourishing.

It is important to maintain the strength of these local supply chains and vital that OEMs and SMEs ensure that supply chains are as robust as possible, have flexibility to adapt to new market conditions and future proof the organisations strategic objectives.

The skills shortage remains one of the biggest issues in not only automotive but across the whole of the manufacturing sector and developing a more stable supply chain to attract the strong skills base around it is critical to developing a successful innovation led climate to continue the growth of the automotive industry.