Trends for the Future

Berger and Gattorna (2001) considered the future trends in automotive industry while envisioning the future of supply chains, and identified different key trends that they believe will continue to transform automotive industry. They stated that the traditional bricks-and-mortar car and component manufacturers need to reinvent themselves to embrace the age of the Internet. Change in these companies will be driven by the growing visibility of the best getting better and the rest getting worse. As traditional companies realize the implications of the changes required to remain competitive, there will be a new wave of outsourcing and alliances that will fundamentally change the nature and composition of auto-industry.

The trend toward new types of supply chain service providers is likely to accelerate and be dominated by two types of companies: those that specialize in owning and operating core assets and those that specialize in supply chain optimization services in auto-industry. The supply chain asset companies will focus on consolidating assets that serve multiple companies across the industry. Their competence will be rationalizing assets and providing low-cost service operations. Asset operations will become more global once the earlier stages of regional rationalization are achieved. Supply chain companies that specialize in supply chain optimization are still in early stages of development. They have their roots in clicks-and-mortar concept and develop their expertise by applying advanced information technology to optimization problems such as effective 24-hour delivery of slow-moving parts on a global basis. A new type of smarter supply chain operator will be driving these companies. The supply chain optimization specialists will take responsibility for managing complex cross-company optimization services, collecting data from multiple organizations in auto-industry, and analysing and optimizing operations on a real-time basis. Berger and Gottorna (2001, p. 186) see these companies operating command centres that are not unlike those of a military operations room. Their challenge will be to optimize complex supply chains, increasingly in real time, to help companies synchronize operations.

It is almost certainly true that the world of tomorrow will belong to those who are brave enough to move early and decisively. Inspirational leadership will be an essential ingredient for success. New emerging technologies in e-business will strengthen the supply chain of the auto-industry as we move into value chain competition. The auto-industry will explore a range of waves of change, mostly driven by e-business technologies, that are having an impact on the ways in which companies compete with each other. The intensity of these waves is high, posing significant challenges for business. However, even as business leaders respond to today's challenges, they must also keep an eye on the horizon for the first signs of the waves to come. Beyond such monitoring, those companies that can influence the future of their industry will surely dominate.