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industry lost $ 210 billion in revenue due to chip shortages slowing or stopping vehicle production altogether . And when the industry only uses five-to-ten percent of semiconductors , with most going to consumer electronics , automotive manufacturers often find themselves at the back of the queue . Some even have to choose which features to include on vehicles to try and keep up with demand , leading to costly retrofits to give customers the functionality they want . With no foreseeable end to the shortages , leaders seek creative ways to bolster their supply chains and meet demand .
Shortages aren ’ t fully solved by finding new suppliers and creating an extended supply chain . More suppliers equal more risk of weather disruptions , port bottlenecks , and labor shortages , and every supply chain link should be closely monitored to handle issues proactively . Some have turned to nearshoring to produce parts locally and alleviate these risks . However , a lack of raw materials can cause manufacturers to continue to source components from further afield – and the complexity continues . Ideally , short-term fixes will be combined with longer-term planning , allowing automotive leaders to balance suppliers and strengthen stock effectively .
Fueling up for the road ahead
Connecting the dots between a wealth of suppliers and stakeholders may seem challenging . But it ’ s a smart move for manufacturers looking to create collaborative , ‘ future-proofed ’ supply chains . Crucially ,
... every supply chain link should be closely monitored to handle issues proactively
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