Automotive industry has been facing major challenges due to fierce competition, increasing operational complexity, technology changes, shortened product lifecycle and frequently changing customer needs. Due to globalization, the automotive industry has changed its model of traditional local business to that of global business. Auto parts are being sourced from all over the world to achieve cost reduction, quality and competitive advantage. Moreover, the original equipment manufacturer (OEM) has more number of suppliers and they are facing a tough task coordinating and collaborating with all the suppliers. The new age customers want customized products according to their tastes like automobile colour, interior, audio system, etc. This customer behavior implies that dealers and manufacturers have to maintain adequate inventory to satisfy the customer. To improve profitability and efficiency, automotive players are seeking ways to achieve operational excellence, reduce operating cost and enhance customer service through efficient supply chain management. Efficient and effective supply chain management plays a very important role in the auto industry. The automotive industry is changing its business model with innovative supply chain to reduce cost, create customer buying experience and quality. SCM helps in expansion of sourcing partners, streamlining customer requirements, optimizing sourcing practices, inventory management, accurate forecasting, better suppliers’ relation, co-ordination and co-operation across supply chain, better visibility and control over the process, reduction of lead time, attaining flexibility and better customer management.
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