~ Supply chain management for electric vehicle production ~
In October 2021, while petrol stations saw long queues, enquiries for electric vehicles (EVs) soared. The petrol shortage provided an additional nudge to accelerate the already growing consumer appetite for greener vehicles. Here Chris Billinge, business development director at supply chain specialist TFC, shares his insights into how this growing market can achieve further production efficiencies and create more time to innovate.
In September 2021, almost 33,000 pure electric cars were registered in the UK, setting a new monthly record and nearing figures for the whole year of 2019. And it’s not just cars — we can expect electric vans, trucks, buses, trains, motorcycles and golf buggies to become the norm in the coming decades. As the UK Government’s 2030 deadline for ending the manufacture of petrol and diesel cars draws closer, manufacturers are gearing up their electric vehicle production to see in a greener future.
Unlocking growth potential
As these committed, collaborative and innovative businesses scale-up EV production, manufacturing leaders are looking for ways to unlock growth, streamline costs and build processes that are productive and profitable. Understandably, supply chain management is high on the agenda for British manufacturers as they look to secure the components and assemblies needed for their products.
In EV manufacturing, every component, no matter how small, has an important role to play, which makes managing supply carefully extremely important. Take fasteners, for example. Though typically regarded as an unglamorous component, they are critical to the structural integrity of an electric vehicle. By considering their supply early, manufacturing managers can devise an effective way to deliver these essential components to the point of use, reducing the risk of stock-outs while minimising inventories on site.
The good news is that eMobility businesses don’t have to go it alone. There are great benefits to working with a supply chain partner that can help manage component supply and material flow. One approach, popular on many traditional automotive assembly lines, is adopting a vendor managed inventory (VMI) solution. This involves a third-party provider working with a manufacturing business to assess its unique needs, before proposing either a tailored or standard system and taking responsibility for supplying components to the point of use.
As part of this process, the VMI partner will work alongside production staff, supply chain teams and assembly workers to gain a deep understanding of the business, from which they can suggest areas for continuous improvement. For example, by analysing and making recommendations on how components are moved, who uses them, where they are needed and at what time. These recommendations and involvement of the partner as an extension of your team can help enhance technical specifications, efficiency, productivity and material flow, ultimately driving net profit enhancement. As well as this, the VMI provider could work with you on sustainability, such as by introducing alternative packaging to meet ISO 14001 or other environmental standards.
In particular, VMI can help businesses in high growth mode, as it both improves manufacturing efficiency, and removes the supplier purchasing, invoicing, chasing and negotiating headaches from supply chain personnel. Therefore, this frees them up to focus on tasks that add more value to the business.
More time to innovate
The result of a streamlined supply chain is more manufacturing hours in the day for production teams, as well as more cash flow available to invest in core areas of the businesses. Importantly, outsourcing the management of vendors and inventory means the critical responsibility of developing zero emissions technology can be the first and only focus.
TFC has a long history of supporting automotive manufacturers with highly successful inventory management solutions that deliver on-time production, smarter stockholding, a reduction in supply base and positive cash flow benefits
For more information on VMI services, call 01435 866011 to speak to our experienced team or visit the TFC website https://www.tfc.eu.com/products-services/vendor-managed-inventory-services/.
