What automakers and their suppliers can learn from the global COVID-19 pandemic

Hedging to avoid supply chain disruptions

The halt of production happened for three reasons—supply of labor was interrupted due to stay-at-home orders or as employees laid down tools because they got sick. Even if production were to continue, in many cases the just-in-time nature of the auto industry means production would halt as the result of suppliers stopping operations.

Humans as an operational risk

In order to reliably restart, OEMs will in many cases need to come to terms with the fact that as biological organisms, human workers present risks in an environment where biohazards and communicable disease may be resurgent globally.

Product lifecycles and demand planning

The pandemic has upset demand, which creates new headaches for demand planning. Automakers will need to closely monitor in real time metrics that indicate resurgence of demand and send pull signals for parts and bring back workers accordingly.

Finding a footing for the future

Volatile times are never fun, but we can take lessons away from them. Automakers must use the management principles and ERP software at their disposal to deal with the return to full productivity.