Procurement's role in a sustainable automotive supply chain

Capgemini are examining how the automotive industry can maintain a sustainable supply chain and how procurement plays a key role

The report from Capgemini ‘Transforming the Automotive Industry Supply Chain’ breaks down the many challenges that are facing the industry, and the need for resilience, intelligence, connectedness and sustainability.

The challenges are:

  • Political and economic events that are forcing rapid evolution in supply chains to increase risk management and flexibility.
  • Rapid changes to regulation that require supply chain visibility to meet ESG laws and guidelines.
  • Customer expectations are changing as they expect an omnichannel purchasing journey and want to buy extra features for the vehicle while using it.
  • Changes to the automotive industry such as EVs and new business models.

The research goes on to claim fewer than 20% of organisations across all industries consider themselves able to handle today’s supply chain challenges with ‘consistent success’ and the automotive industry appears to fit into that exact pattern.

Five key levers in transformation 

Capgemini indicates there are five key levers for change in supply chain transformation.

  • Evolution
  • Orchestration
  • Data
  • Technology
  • Talent

Many of these points interconnect with the importance of visibility and data right across the supply chain to be able to identify risks, increase resilience and find opportunities.

What action can be taken now to increase resilience? 

There are certain actions automotive companies can seek to take now to increase their resilience, including a key role for procurement operations.

  • By rethinking planning it becomes possible to forecast demand better, and update suppliers in real-time.
  • If companies embrace transparent collaboration within their procurement operation, it will strengthen connections with suppliers, by promoting data sharing and mutual trust.
  • Getting help with innovation by using the right advisors and expertise can help a company move forward at pace.
  • Building a data-driven culture will ensure that the insights it provides can drive action and decision making.

The conclusion of the report says “the journey to a resilient, connected, intelligent, and sustainable supply chain requires a multi-faceted transformation, including the introduction of an intelligent data layer (integrating technology from hyperscalers and others) to provide visibility, decision support, and risk identification. This transformation will facilitate complex scenario planning and enable suppliers to respond effectively to dynamic decisions across the supply chain.”

You can read the full Capgemini report here.


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