Why you need global automotive production facilities with a local footprint
Ever-shifting consumer demand and the changing global regulatory environment are driving major auto parts makers to set up operations closer to their customers. Environmental issues, such as the need to reduce CO2 emissions from long-distance shipping, propel many changes in the industry. At the same time, the Asian market is expanding and U.S. and European automotive manufacturers are producing more cars, or substantial parts of cars, in China and other Asian countries.
For quality, efficiency, and cost effectiveness, automakers seek to standardize many of the components used across different platforms and in different locations. Re-using parts and processes means that higher-quality parts are more likely achievable.
Managing Global Supply Chain Disruptions
Since the onset of the COVID-19 pandemic, the world now knows that major disruptions to the supply chain are quite possible. The cost of production interruptions leaving manufacturing operators standing around waiting for parts is severe. Partnering with a supplier that has a location close to your factories can increase the resilience of your supply chain.
Benefits of producing locally
Buyers of serial automotive parts who want to create efficiencies in their supplier management as well as their quality control processes should look for corporate suppliers with factories in strategic places around the world. By choosing a supplier certified to IATF 16949, you are assured that parts you source from any of their factories will meet the highest quality standard.
A supplier with a local footprint also can increase the flexibility of your supply chain. This will affect:
- Logistics - Local suppliers can improve efficiency, profitability, performance, safety, and reliability of your operations. For example, shipping locally, as opposed to overseas minimizes the cost of freight and packaging.
- Valuta - Local production facilities make possible an operational hedging strategy allowing you to manage risk from currency fluctuations by making dynamic adjustments to manufacturing locations.
- Import duties - When tariff rates rise, avoid price increases and reduced profits by reworking your supply chain and moving operations to another country.
- Cultural and language barriers - Avoid costly misunderstandings by employing local expertise to help navigate the nuances of foreign business culture and regulations.
- Sustainability - Using local factories can improve environmental sustainability across all parts of the supply chain, including distribution, warehousing, and inventory management.
As a result of these factors, buyers of serial parts often can benefit from sourcing parts close to where they are most needed. A global-local production strategy can reduce risk, minimize costs, and maintain zero defects in your serial purchases.
Choosing a supplier with global presence and a local footprint can help increase your part quality while reducing costs. Download the white paper: 10 Crucial cost drivers for automotive hot forged parts to find out how higher quality parts and manufacturing processes can actually reduce your total cost of ownership by maximizing efficiency and minimizing risk.
About Bons & Evers Group
Bons & Evers is the leading supplier of non-ferrous hot forgings for the automotive industry with locations in The Netherlands, Germany, France, Hungary, and China. Contact one of our experienced process designers to discuss your serial part production supply chain.