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Creating a parts oriented Order Processing Supply Chain


Order Processing Inventory Automotive Supply Chain

The world is changing rapidly and in the middle, if not even the driver of this process, is the automotive industry. Globalization and individualization megatrends set the pace, supported and ultimately made possible by innovations in information technology. Only ten years ago the vast majority of suppliers were located in the vicinity of the OEMs to better provide the parts or assemblies necessary for production. Most Tier 1 suppliers were typically located with a just-in-sequence or just-in-time assembly plant near or at the customer site. For example, a local supply region in Europe made it possible to get parts within 24 to 72 hours of production.

Since the order processes were modeled using optional capacities, there was little to worry about. Whether the parts were in inventory or not, the shipping lead-time was on only 72 hours with a production order lead-time of around three to four weeks. It was enough for an assembly plant to know that 300 sunroofs could be delivered per day. The model or configuration choice was a secondary consideration because sunroofs came from a nearby supplier or from a sub-assembly within the final assembly plant. The supplier could deliver the desired sunroofs by assembling them shortly before they were installed and to the exact configuration for the specific sequenced vehicle.


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