Is Research Revealing Vulnerability at Heart of Auto Supply Chain True for All Supply Chains?

Actify, the leading provider of visualization and program management solutions for the automotive supply chain, recently announced the publication of a first-of-its-kind independent research study focused on how vehicle component development programs are managed by key suppliers to the automakers. The double-blind study was based on interviews with 183 top tier automotive suppliers across the US, Canada, and the UK.

The question is: do these findings reflect what may be the key problem in ALL supply chains, including construction, today?

With stories such as “Ships wait off the California coast, unable to unload their cargo, “Truckers are overworked and overwhelmed, often confronting logjams” or “Just 180 More Days Until Your Oven Arrives: Appliance Delays Cause Havoc,” this report may hold the answer: program managers need better tools.

Program managers carry responsibility for customer satisfaction, on-time delivery, and profitability.The program management function at an auto supplier is charged with shepherding newly awarded programs through an exhaustive development and launch process that may extend for many months prior to full-scale production.

But ushering in product-to-installation is the problem faced in all supply chains. While program managers have long compensated for the lack of technology with extraordinary effort and dedication, the fact is, they are put in a precarious situation and a source of vulnerability for as overburdened teams try to anticipate and avert problems.

Now, according to the report, an increasing volume of programs due to shorter model lifespans, new OEM market entrants and electrification, represent a real threat to operational success. They key statement?

At a time when reports of supply-chain disruption and material price volatility fill the headlines, it is crucial that suppliers equip program management with tools that measure up to the task and give suppliers the insight and agility required to communicate and collaborate among all program stakeholders.

Dave Opsahl, CEO of Actify who did the report said: “Programs represent the contract relationship between Auto OEMs and their suppliers, and are the mechanism used across the industry to manage the outsourced supply chain. Program managers are the orchestrators that ensure that every department and every downstream supplier is informed and on track to achieve delivery and performance targets. Yet despite their critical role, a lack of purpose-built software has forced suppliers to create their own management tools, often relying on off-the-shelf project management tools and spreadsheets.”

According to the key findings from the research study:

• 91% of respondents indicate their company is actively pursuing improvements in program management KB-Editor Comment: What supply chain isn’t? We’ve interviewed key distributors in the supply chain for kitchen and bath products, and the key finding was: “We do what it takes, including hording products for our customers.”
• 65% of program managers are communicating hourly or daily with customers, in addition to suppliers, management and other departments within their own company.
• 65% of program managers are sending files hourly or daily to customers, in addition to other program stakeholders. KB-Editor Comment: A daily occurrence from our investigations into our own channels. Problem solving has always been at the heart of supply chain logistics, now more than ever.
• 40% of program managers are still inputting data to physically printed documentation KB-Editor Comment: one company we spoke with pulls information from the SAP system into Excel spreadsheets “to be able to manipulate it.” Rather than wait for a programmer to program, these innovative managers utilize the tools they have to keep things moving.
• 59% still track program status in physically printed paper forms, and 74% still use spreadsheet software, and there is heavy customization of any tool that is used, including ERP, PLM, PDM, etc.
• More than 50% reported significant to moderate problems with a range of issues such as errors being missed in downstream communications, lack of consistent, company-wide processes, and internal systems consuming time and creating dependence on individuals
• 29% indicating the pandemic has made program execution harder

The full report can be downloaded here.

“Our research shows that the complexity of today’s automotive programs is skyrocketing. The workload to successfully manage and deliver these programs, despite that increasing complexity, falls heavily on program managers,” said Chad Jackson, CEO of Lifecycle Insights and author of the report. “The study’s findings clearly show the shortcomings of manual, ad-hoc practices and cobbled-together IT solutions for program management. Executives are searching for ways to improve. Investing in improvement initiatives, and enabling them with modern, progressive solutions, falls squarely into that effort.”

Bottom line? “Program managers must proactively identify and resolve issues before they become disruptions.” Software must help that process – and so must the experience of the program managers themselves, who face the day to day problems/disruptions that these days, come out of nowhere.