Jabil Explains Why Risk Management is Essential to the Automotive Supply Chain

Events such as the 2011 earthquake and subsequent tsunami in Japan, persistent component shortages, tariffs and evolving regulatory standards continually push the automotive supply chain to reframe how it prepares for the unexpected.

These ongoing challenges have taught automotive industry leaders the importance of supply chain resilience and ingrained risk management best practices. Yet, 2020 was the first time we experienced a complete global shutdown. COVID-19 forced plant closures, country-wide lockdowns, component constraints, job losses and staffing shortages.

In a September 2020 Jabil Special Report: Supply Chain Resilience in a Post-Pandemic World, Dimensional Research surveyed 105 automotive OEM decision-makers about the impact of COVID-19 on the automotive supply chain and their company’s risk management practices. When asked about their supply chain strategy for the next two years, automotive decision-makers clearly prioritized resilience and risk management.

In the next two years…

are focused on reducing risk
are focused on the ability to respond rapidly to disruptions

If there is a silver lining to the disruptions of the last decade, it’s that they revealed supply chain vulnerabilities will always exist. The secret is in how we prepare for and address them. Looking ahead, the automotive supply chain continues to be impaired by electronic component shortages while adapting to a new set of industry challenges born out of electrification.

How can the industry make the automotive supply chain more resilient? Here are four considerations: