Supply Chain Resiliency: A Proactive Approach
The past several years have been a perfect storm for global supply chains. Severe weather events, geopolitical tensions and other disruptions have exposed the vulnerabilities of traditional just-in-time supply chain models. As a result, companies are being forced to adapt and innovate to mitigate risks and ensure business continuity.
Building global supply chain resilience
At Aptiv, we've taken a multifaceted approach to building global supply chain resilience. This includes investing in new technologies to achieve end-to-end visibility, as well as implementing risk management and resiliency management strategies. While risk management is typically reactive, resiliency management is proactive, enabling us to anticipate and prepare for potential disruptions.
One key aspect of our approach is working closely with engineering teams to design products with supply chain considerations in mind. By providing information on parts that are nearing end-of-life or using old technology, we can identify potential risks and develop mitigation strategies early on. This level of visibility allows us to drill down to a specific component part number level, enabling us to take targeted actions to prevent disruptions.
The stakes are high; a single $0.10 part can bring down a $100 million revenue product line. By identifying potential risks and taking proactive measures, we can ensure that our customers remain connected and our business continues to thrive.
Resilient supply chains are local and flexible
Our strategy is to be local to the customer, developing supply chain networks that support our global locations. We're also exploring alternative sources for parts, enabling us to quickly swap them out in the event of a risk event. This allows us to respond rapidly to disruptions, ensuring minimal impact on our customers.
In practice, this approach has already paid off. After an earthquake impacted part of our supply chain, we were able to identify impacted OEMs and semiconductors within eight hours and notify our customers with a solution within 24 hours. This level of responsiveness is unprecedented in the automotive industry, where it typically takes up to two weeks to react to a disruption.
Disruptions are the new normal
The challenges facing global supply chains are unlikely to dissipate anytime soon. However, by adapting and being agile in our response to these challenges, we can see around the corner. Our investment in digital twin technology — built internally to meet our specific needs — is a key part of this effort. We look forward to sharing this capability with our customers, suppliers and partners, so we can navigate the storm together.
Building supply chain resilience requires a proactive and multifaceted approach. By investing in new technologies, working closely with engineering teams, and developing alternative sources for parts, we can ensure business continuity and stay ahead of the challenges that lie ahead.