supply chain management at international automotive case study solution

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Supply Chain Management at International Automotive

By: Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Y. Jung

Paul Salinas had just finished moving into his new office in Reynosa, Mexico. He closed the door and sat down, taking a moment to remember how his career had started with International Automotive…

• Length: 9 page(s)
• Publication Date: Oct 31, 2011
• Discipline: Operations Management
• Product #: W11452-PDF-ENG

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Paul Salinas had just finished moving into his new office in Reynosa, Mexico. He closed the door and sat down, taking a moment to remember how his career had started with International Automotive Company. As he was finishing his engineering studies, Salinas had received a job opportunity as a trainee in the summer of 1995. That was in the company's Querétaro plant, in his hometown. This initial position as an administrative assistant was not necessarily exciting but he held on, knowing there was great potential for him to build his career within the company. During this time, Salinas was trained internally (six months of initial training followed by several specific training sessions per year) and sent to the company's headquarters in Germany before spending some time in the plant in Detroit as well. In Germany, he received a six months long training, which was followed by annual training sessions that lasted several weeks each time. Training in Detroit took places about three times a year, and lasted a few weeks at a time as well. He was familiarized with the technical and business aspects of running a manufacturing plant as he moved from promotion to promotion, and had held the position of operations manager for five years in Querétaro before moving to Reynosa. Apart from his remarkable career track, Salinas had the advantage of speaking Spanish, English and German. All of these qualities made him the perfect candidate to rebuild the entire supply chain in the plant that the company had just acquired from Motor Company II in Reynosa, Mexico in 2009.

Learning Objectives

This case examines various elements of supply chain management (SCM) that offer improvement opportunities. A well-managed SCM system complemented with the lean management system enables a more efficient and effective operation, therefore turning a company into a more profitable organization. This case presents the following main objectives: to recognize the key elements and benefits of SCM; to complement SCM with lean management; to identify key challenges and obstacles of SCM. This case can be used for undergraduate, graduate and executive levels. It would be appropriate for courses or workshops dealing with operations management, SCM and lean management.

Oct 31, 2011

Discipline:

Operations Management

Geographies:

Canada, Mexico, United States

Ivey Publishing

W11452-PDF-ENG

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• To react fast to disruptions, companies need to enhance their monitoring, predictive modeling, and crisis management capabilities.
• To structure operations for resilience, they need to focus on network design, sourcing strategy, planning, and flexibility.

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Business Resilience

/ article, preparing auto supply chains for the next crisis.

By  Justin Ahmad ,  Rajesh Shetty ,  Jeremy Kay ,  Wolfgang Schnellbächer , and  Fernando Rodriguez

Key Takeaways

The auto industry is in a period of significant upheaval. Increased risk and shocks in the supply chain are complicating the industry’s efforts to introduce major technological changes to vehicle design. The initial blow was dealt by the COVID-19 pandemic, which was followed by the semiconductor shortage. These interrelated crises have caused unprecedented disruptions to auto industry supply chains, exposing the industry’s vulnerabilities and lack of risk visibility. The result: approximately 12% of global automotive output vanished from 2020 to 2022.

Even as the auto industry works to recover, risks relating to semiconductor demand–supply imbalances persist. Chip content per vehicle is anticipated to grow by approximately 7% annually. Although additional semiconductor production capacity is expected to come online, certain types of nonlogic chips (namely, analog and MEMS 1 1 Micro-electromechanical systems. Notes: 1 Micro-electromechanical systems. ) may remain in limited supply for automotive applications. The concentration of chip manufacturing in certain regions and countries also poses a risk. Notably, approximately 80% of back-end fabrication capacity is in Mainland China, Taiwan, and South Korea. Growing geopolitical tensions could mean that some of the additional planned capacity does not come online or that companies from certain regions will be unable to access it. While semiconductors presently are a supply challenge, new vehicles require a wide range of materials—including rare metals for batteries—many of which can be subject to supply disruptions.

Given the impact of recent supply chain woes and uncertainty surrounding when the volatility will subside, auto industry executives are increasingly seeking new methods to anticipate risks across the supplier spectrum and secure critical parts, commodities, and materials. The renewed urgency is buoyed, in part, by the accelerating shift to electric vehicles, which is adding many new suppliers and component types.

To facilitate these efforts, BCG has developed a framework that companies can use to proactively identify and avoid risks whenever possible and to absorb and mitigate risks if they occur. This approach encompasses a company’s operating model, including metrics, planning and sourcing processes, risk modeling, contingency planning, information flows, and supply chain collaboration.

BCG’s Resiliency Survey

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Longstanding Practices Impede Effective Responses

In working with auto OEMs and suppliers, we have observed several supply chain shortcomings that have made it difficult to navigate disruptions. Supply chain systems and management practices have long favored optimizing operations by making supply chains as lean as possible, while simultaneously pressuring suppliers to reduce costs and inventory. Current just-in-time approaches leave little buffer to absorb disruptions.

Compounding the issue, companies lack adequate supply chain visibility. Supply chains have become so complex that automakers are frequently unable to identify suppliers beyond tier one. As a result, automakers do not know these suppliers’ manufacturing locations, lead times, and production and shipment track records—or even the parts or materials they supply.

During the semiconductor shortage, lean supply chains and the knowledge gap stymied response efforts and the ability to manage stable production schedules. Auto companies spent significant time early in the crisis simply trying to gain visibility into the layers of their supply chains. A BCG analysis using a web scraper to search for keywords (such as “semiconductor,” “shortage,” and “scarcity”) in local languages found that alerts and news about chip shortages began to surface in the second quarter of 2020. However, automakers did not begin to implement strategic responses for another six to nine months.

Some auto OEMs were better prepared than others and, although they were affected by the chip shortage, they clearly outperformed. For example, BMW and Tesla fared better because they had developed strategies to mitigate potential disruptions. They also went beyond their tier-one suppliers to establish relationships and volume commitments directly with chip manufacturers. When the crisis came, the better-prepared OEMs experienced lost unit volumes of less than 10%. Those that were slow to react suffered volume losses of 15% to 25%.

A Framework for Resilience

To address these challenges, auto companies must build resilience—the ability to quickly identify and assess risks, respond quickly, and absorb the impacts of disruptions across the supply chain. BCG’s operations resilience framework covers the wide variety of capabilities required. (See Exhibit 1.) The two main aspects of the framework are reacting fast to disruptions and structuring operations for resilience.

React Fast to Disruptions

Responding quickly to a crisis requires proactively identifying risks to avoid them when possible, as well as having focused practices and team members to deploy when disruptions do occur.

Monitoring and Sensing.

Gathering risk information from both internal sources (such as procurement, logistics, and manufacturing) and external feeds provides intelligence that companies can analyze to create risk thresholds and sensing algorithms. In supporting companies, we have found several lenses for visualizing risks to be particularly helpful. These include supplier risk mapping, commodity and parts risk mapping, and a multi-tier supplier network view. Companies can apply these views to assess specific risk parameters. This could include, for instance, identifying suppliers facing location-related risks arising from an outbreak of disease or susceptibility to extreme weather events. It could also provide a window into the likelihood of supply bottlenecks caused by a single upstream supplier’s inability to source a specific material.

Access to data covering a wide range of risk categories is essential for risk monitoring and sensing. We have observed a significant increase in the scope of monitoring. For example, one OEM shared an overview of more than 30 risk categories, from geopolitical tension to the insolvency of individual suppliers. Exhibit 2 shows a selection of the leading risk categories.

Companies can glean information from structured data through the continuous monitoring of risk indicators from a variety of sources, such as trends in global cargo movement and commodity demand and supply. They can also gather it from unstructured data via web crawlers that look for keywords such as “shortage” and “shutdown.” A critical part of this intelligence gathering involves developing a comprehensive map of suppliers across all tiers and their interconnections.

Vendors of supply chain risk management platforms also provide curated information on worldwide risk events. Partnering with these vendors can help to accelerate risk monitoring and supplier mapping. This ongoing monitoring process requires collaborating with partners across the value chain, fostering trust, and investing in a set of data and visualization capabilities.

Predictive Modeling.

Dynamic models, such as digital twins , can assess a range of possible risk outcomes and play an important role in helping decision-makers develop their perspective on potential supply disruptions, the business impact, and how different actions can mitigate them. Understanding the implications of risks on overall business objectives is critical. Best practice is to identify the risks from the perspective of both the lost supply volumes and financial costs—and use this information to prioritize where to focus. In some cases, we have observed a scattershot approach in which companies dilute their attention across a multitude of risks with varying degrees of severity and time horizons, limiting the impact of the overall mitigation effort.

Crisis Response.

When significant risks do materialize, it is important to have a coordinated cross-functional response that enables rapid decision-making. This would generally involve purchasing, planning, manufacturing, logistics, sales, marketing, and finance. At the center should be a team that manages risk mitigation by coordinating and prioritizing activities, driving decision-making, and facilitating communications. End-to-end transparency across the value chain on incoming supply, operations schedules, logistics performance, and customer needs is critical to ensure an effective response. Additionally, the team managing risk mitigation should have frequent engagement with top executives to clear roadblocks and identify where executive-to-executive engagement is needed.

Structure Operations for Resiliency

The other half of our framework identifies levers to improve resilience within the supply chain, enabling companies to absorb and mitigate higher degrees of risk.

Network Design.

Companies should design and pressure test a supply chain against a range of disruption scenarios. By establishing risk visibility and comprehensively mapping the supply chain network in-depth—including customers, suppliers across tiers, and products—a company can proactively assess different types of disruptions and scenarios. It can identify where weaknesses and structural risks exist in the network, the severity of any potential impacts, and cost implications under each scenario. This enables the development of mitigation strategies and consideration of network options, such as reducing the concentration of manufacturing/supply base in higher risk regions and making future footprint and sourcing decisions using a “risk premium” for these locations. Applying a risk premium enables a more holistic assessment of the trade-offs between resilience and cost.

Sourcing Strategy.

Closely linked to network design, companies’ supplier selection process should include a method to evaluate sources of supply risk—such as supplier-related problems (financial, operational), tariffs, or transport route issues (port backlogs)—and the impact on resilience. In addition to identifying potential disruption scenarios, companies require greater transparency into the broader supply chain. As previously noted, detailed mapping of key products, components, and commodities across supply tiers is critical. With this in hand, companies can more holistically evaluate cost-versus-risk trade-offs, define risk tolerance, and develop aligned sourcing strategies .

For example, one strategy could include investing in redundant capacity and establishing a faster process to ramp up alternative material sources, while monitoring risks and defining triggers to activate an appropriate risk response.

Planning and Inventory Management.

Building resilience requires having a sales, inventory, and operations planning (SIOP) process upgraded for risk management. For example, this includes risk sensing and scenario planning, executive engagement on risk trade-offs, increased transparency and communication with suppliers, and faster cross-functional decision-making.

Inventory planning is critical to protect against unexpected shocks and disruptions. Companies need to develop adaptive inventory targets with triggers that adjust inventory levels based on risk tolerance. When risks are heightened, the company builds buffers at appropriate stages in the supply chain to strengthen resilience. This is a dramatic contrast to the slow-moving adjustments and target setting in many of today’s supply chains.

Product and Engineering Flexibility.

Thoughtful product design that considers potential supply risks is important to avoid manufacturing disruptions. Engineering and product development teams need to incorporate risk scenarios into their design assessments. Possible strategies include increased use of common components and establishing a process to make rapid engineering changes and substitutions when disruptions and supply constraints arise.

During the semiconductor shortage, many OEMs had limited flexibility to shift to alternative suppliers or use substitutes for highly customized chips. This dramatically constrained their response options. OEMs were forced to prioritize which vehicles to produce and also reduce features—such as heads-up display—or build and hold semi-finished vehicles pending arrival of the missing components.

BCG’s Resiliency Survey: Auto Companies Report Lagging Performance

In the summer of 2022, BCG and APQC fielded a global survey of 150 companies across various industries to assess their capabilities relating to the elements of the resilience framework. Based on their self-reported responses, we gave each company a score and placed it on a resiliency matrix divided into four quadrants: thriving, responsive, reactive, and insulated. (See Exhibit 3.)

Across all industries, only 10% of respondents are thriving companies that excel in all dimensions of the framework. Among the thrivers, there were several from the electronics, industrial, pharmaceutical, and consumer sectors. Notably, 80% of respondents, regardless of industry, are reactive: they are unprepared to quickly address disruptions that may occur, and their operations are not structured for long-term resilience.

Automotive respondents, both OEMs and suppliers, are all in the reactive category. These companies self-reported low maturity with respect to their capabilities to react fast and the fitness of their operations to absorb disruptions.

A substantial number of auto companies fall short of employing best practices for monitoring supply chain risks. Most thriving companies use advanced analytics (including AI) to continually monitor and evaluate risks in their network. However, only 15% of auto companies surveyed have these capabilities.

Among auto respondents, 35% report having low risk visibility and ad-hoc manual communication with customers and suppliers. The same percentage report using manual or static tools to collect data from vendors regularly. Only 30% have two-way communication with suppliers through a digital or real-time application and interface.

In addition, 70% of auto companies reported lacking an adequate playbook for responding to disruptions or a crisis response team that can be activated quickly. Thriving companies, on the other hand, have a strong and dynamic playbook, with embedded risk and resilience capabilities to address complex disruption scenarios.

Auto companies also report lacking robust sourcing strategies that embed resiliency. The majority of auto companies surveyed primarily select suppliers based on cost. In addition, these companies report an inadequate multi-sourcing strategy. Only 30% identify critical sub-categories and deploy multi-sourcing strategies and rapid recovery plans based on risk.

Many auto companies lack robust supply and demand planning processes. While thriving companies use advanced analytics to build predictive demand forecasts and set inventory targets, auto companies struggle with low forecast accuracy and lack a robust process for setting inventory targets. Even auto companies that report having more robust planning processes noted they could do more to break down silos and increase cross-functional collaboration and executive engagement.

Finally, auto companies need to strengthen their design and engineering capabilities to promote flexibility and agility. A majority reported that they use custom components for most new products and lack modular designs that allow for more flexibility of component usage. Although most auto companies report having a standard engineering and design change process, many are unable to expedite and approve design changes quickly enough when a supply crisis arises.

Auto Companies Are Prioritizing Investments in Crisis Response

The survey also asked respondents how they are prioritizing near-term versus long-term issues. Auto companies reported focusing on improving near-term crisis response—the “react fast” half of our framework—while giving much less attention to longer-term resilience. (See Exhibit 4.) This emphasis is understandable considering that companies are still stinging from their lack of preparedness for the supply chain crisis of the past few years. However, increasing effort on long-term structural changes can help insulate companies against future disruptions, lowering the cost and impact of the next crisis.

A Roadmap for Resilience

Achieving a resilient supply chain is a journey, and like many other sectors, the automotive industry is just getting started. (See Exhibit 5.) To stabilize supply chains in the near term, auto OEMs and suppliers must first establish end-to-end visibility and incorporate robust risk-monitoring capabilities that utilize both internal and external data feeds. By implementing these capabilities along with risk KPIs and dashboards, companies can detect potential disruptions and react faster to risks.

Next, companies can reduce risks in the medium term by enhancing existing SIOP processes with scenario and trade-off analyses that are linked to risk monitoring across the supply chain. By regularly mapping the products and suppliers in accordance with their risk profile, companies can pinpoint where to dynamically add inventory buffers to strengthen resilience.

To create a structurally resilient future, companies should focus on sourcing strategies to de-risk critical materials and improve transparency and communication with customers and suppliers. Pressure testing the network and bill-of-material design for resilience based on risk scenarios is also important. Furthermore, companies should build flexibility into engineering processes and product design to allow for the use of alternative materials and substitutions and to develop accelerated design change processes to better respond to future disruptions.

Rewiring the Organization for Risk

Auto companies must prepare their organizations for risk identification and response by fully integrating resilience capabilities into their operating models. At its core, this requires strengthening business processes and managing organizational change to ensure that anticipating and responding to supply chain risk is integrated into core metrics and processes. Managing this risk should be an integral part of operational functions such as supply chain planning, procurement, and logistics.

A crucial first step is improving transparency across the supply chain and establishing mechanisms to trigger internal and external communications about potential problems. For example, executive performance metrics should include transparency to revenue at risk, which helps to provide a basis for prioritizing activities and investment. Developing the data foundations for transparency should not be postponed until the next crisis event, but instead pursued as an ongoing capability enhancement.

Finally, a cultural shift that prioritizes risk management may be necessary. For example, incentives can be adapted to reward proactive risk identification and early responses that protect the business. Additionally, recruitment and upskilling efforts should emphasize obtaining or building capabilities for scenario planning, advanced risk analytics, and data engineering. Advanced digital tools, such as AI-powered platforms, can enhance human capabilities and unlock new value sources, allowing organizations to better handle volatility.

The last several years dramatically exposed weaknesses in supply chains across many industries. Auto companies recognize that a sustained commitment to supply chain risk management is critical. To act on this commitment, they must move with urgency to prepare for future supply challenges. Ultimately, supply chain resilience could make the difference between success and failure in an increasingly competitive and radically changing environment.

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Supply Chain Management at International Automotive Case Study Solution

Posted by John Berg on Feb-16-2018

Introduction

Supply Chain Management at International Automotive Case Study is included in the Harvard Business Review Case Study. Therefore, it is necessary to touch HBR fundamentals before starting the Supply Chain Management at International Automotive case analysis. HBR will help you assess which piece of information is relevant. Harvard Business review will also help you solve your case. Thus, HBR fundamentals assist in easily comprehending the case study description and brainstorming the Supply Chain Management at International Automotive case analysis. Also, a major benefit of HBR is that it widens your approach. HBR also brings new ideas into the picture which would help you in your Supply Chain Management at International Automotive case analysis.

To write an effective Harvard Business Case Solution, a deep Supply Chain Management at International Automotive case analysis is essential. A proper analysis requires deep investigative reading. You should have a strong grasp of the concepts discussed and be able to identify the central problem in the given HBR case study. It is very important to read the HBR case study thoroughly as at times identifying the key problem becomes challenging. Thus by underlining every single detail which you think relevant, you will be quickly able to solve the HBR case study as is addressed in Harvard Business Case Solution.

Problem Identification

The first step in solving the HBR Case Study is to identify the problem. A problem can be regarded as a difference between the actual situation and the desired situation. This means that to identify a problem, you must know where it is intended to be. To do a Supply Chain Management at International Automotive case study analysis and a financial analysis, you need to have a clear understanding of where the problem currently is about the perceived problem.

For effective and efficient problem identification,

• A multi-source and multi-method approach should be adopted.
• The problem identified should be thoroughly reviewed and evaluated before continuing with the case study solution.
• The problem should be backed by sufficient evidence to make sure a wrong problem isn't being worked upon.

Problem identification, if done well, will form a strong foundation for your Supply Chain Management at International Automotive Case Study. Effective problem identification is clear, objective, and specific. An ambiguous problem will result in vague solutions being discovered. It is also well-informed and timely. It should be noted that the right amount of time should be spent on this part. Spending too much time will leave lesser time for the rest of the process.

Supply Chain Management at International Automotive Case Analysis

Once you have completed the first step which was problem identification, you move on to developing a case study answers. This is the second step which will include evaluation and analysis of the given company. For this step, tools like SWOT analysis, Porter's five forces analysis for Supply Chain Management at International Automotive, etc. can be used. Porter’s five forces analysis for Supply Chain Management at International Automotive analyses a company’s substitutes, buyer and supplier power, rivalry, etc.

To do an effective HBR case study analysis, you need to explore the following areas:

1. Company history:

The Supply Chain Management at International Automotive case study consists of the history of the company given at the start. Reading it thoroughly will provide you with an understanding of the company's aims and objectives. You will keep these in mind as any Harvard Business Case Solutions you provide will need to be aligned with these.

2. Company growth trends:

This will help you obtain an understanding of the company's current stage in the business cycle and will give you an idea of what the scope of the solution should be.

3. Company culture:

Work culture in a company tells a lot about the workforce itself. You can understand this by going through the instances involving employees that the HBR case study provides. This will be helpful in understanding if the proposed case study solution will be accepted by the workforce and whether it will consist of the prevailing culture in the company.

Supply Chain Management at International Automotive Financial Analysis

The third step of solving the Supply Chain Management at International Automotive Case Study is Supply Chain Management at International Automotive Financial Analysis. You can go about it in a similar way as is done for a finance and accounting case study. For solving any Supply Chain Management at International Automotive case, Financial Analysis is of extreme importance. You should place extra focus on conducting Supply Chain Management at International Automotive financial analysis as it is an integral part of the Supply Chain Management at International Automotive Case Study Solution. It will help you evaluate the position of Supply Chain Management at International Automotive regarding stability, profitability and liquidity accurately. On the basis of this, you will be able to recommend an appropriate plan of action. To conduct a Supply Chain Management at International Automotive financial analysis in excel,

• Past year financial statements need to be extracted.
• Liquidity and profitability ratios to be calculated from the current financial statements.
• Ratios are compared with the past year Supply Chain Management at International Automotive calculations
• Company’s financial position is evaluated.

Another way how you can do the Supply Chain Management at International Automotive financial analysis is through financial modelling. Financial Analysis through financial modelling is done by:

• Using the current financial statement to produce forecasted financial statements.
• A set of assumptions are made to grow revenue and expenses.
• Value of the company is derived.

Financial Analysis is critical in many aspects:

• Decision Making and Strategy Devising to achieve targeted goals- to determine the future course of action.
• Getting credit from suppliers depending on the leverage position- creditors will be confident to supply on credit if less company debt.
• Influence on Investment Decisions- buying and selling of stock by investors.

Thus, it is a snapshot of the company and helps analysts assess whether the company's performance has improved or deteriorated. It also gives an insight about its expected performance in future- whether it will be going concern or not. Supply Chain Management at International Automotive Financial analysis can, therefore, give you a broader image of the company.

Supply Chain Management at International Automotive NPV

Supply Chain Management at International Automotive's calculations of ratios only are not sufficient to gauge the company performance for investment decisions. Instead, investment appraisal methods should also be considered. Supply Chain Management at International Automotive NPV calculation is a very important one as NPV helps determine whether the investment will lead to a positive value or a negative value. It is the best tool for decision making.

There are many benefits of using NPV:

• It takes into account the future value of money, thereby giving reliable results.
• It considers the cost of capital in its calculations.
• It gives the return in dollar terms simplifying decision making.

The formula that you will use to calculate Supply Chain Management at International Automotive NPV will be as follows:

Present Value of Future Cash Flows minus Initial Investment

Present Value of Future cash flows will be calculated as follows:

PV of CF= CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + …CFn/(1+r)^n

where CF = cash flows r = cost of capital n = total number of years.

Cash flows can be uniform or multiple. You can discount them by Supply Chain Management at International Automotive WACC as the discount rate to arrive at the present value figure. You can then use the resulting figure to make your investment decision. The decision criteria would be as follows:

• If Present Value of Cash Flows is greater than Initial Investment, you can accept the project.
• If Present Value of Cash Flows is less than Initial Investment, you can reject the project.

Thus, calculation of Supply Chain Management at International Automotive NPV will give you an insight into the value generated if you invest in Supply Chain Management at International Automotive. It is a very reliable tool to assess the feasibility of an investment as it helps determine whether the cash flows generated will help yield a positive return or not.

However, it would be better if you take various aspects under consideration. Thus, apart from Supply Chain Management at International Automotive’s NPV, you should also consider other capital budgeting techniques like Supply Chain Management at International Automotive’s IRR to evaluate and fine-tune your investment decisions.

Supply Chain Management at International Automotive DCF

Once you are done with calculating the Supply Chain Management at International Automotive NPV for your finance and accounting case study, you can proceed to the next step, which involves calculating the Supply Chain Management at International Automotive DCF. Discounted cash flow (DCF) is a Supply Chain Management at International Automotive valuation method used to estimate the value of an investment based on its future cash flows. For a better presentation of your finance case solution, it is recommended to use Supply Chain Management at International Automotive excel for the DCF analysis.

To calculate the Supply Chain Management at International Automotive DCF analysis, the following steps are required:

• Calculate the expected future cash inflows and outflows.
• Set-off inflows and outflows to obtain the net cash flows.
• Find the present value of expected future net cash flows using a discount rate, which is usually the weighted-average cost of capital (WACC).
• If the value calculated through Supply Chain Management at International Automotive DCF is higher than the current cost of the investment, the opportunity should be considered
• If the current cost of the investment is higher than the value calculated through DCF, the opportunity should be rejected

Supply Chain Management at International Automotive DCF can also be calculated using the following formula:

DCF= CF1/(1+r)^1 + CF2/(1+r)^2 + CF3/(1+r)^3 + …CFn/(1+r)^n

In the formula:

• CF= Cash flows
• R= discount rate (WACC)

Supply Chain Management at International Automotive WACC

When making different Supply Chain Management at International Automotive's calculations, Supply Chain Management at International Automotive WACC calculation is of great significance. WACC calculation is done by the capital composition of the company. The formula will be as follows:

Weighted Average Cost of Capital = % of Debt * Cost of Debt * (1- tax rate) + % of equity * Cost of Equity

You can compute the debt and equity percentage from the balance sheet figures. For the cost of equity, you can use the CAPM model. Cost of debt is usually given. However, if it isn't mentioned, you can calculate it through market weighted average debt. Supply Chain Management at International Automotive’s WACC will indicate the rate the company should earn to pay its capital suppliers. Supply Chain Management at International Automotive WACC can be analysed in two ways:

• From the company's perspective, it can be analysed as the cost to be paid to the capital providers also known as Cost of Capital
• From an investor' perspective, if the expected return on the investment exceeds Supply Chain Management at International Automotive WACC, the investor will go ahead with the investment as a positive value would be generated.

Supply Chain Management at International Automotive IRR

After calculating the Supply Chain Management at International Automotive WACC, it is necessary to calculate the Supply Chain Management at International Automotive IRR as well, as WACC alone does not say much about the company’s overall situation. Supply Chain Management at International Automotive IRR will add meaning to the finance solution that you are working on. The internal rate of return is a tool used in investment appraisal to calculate the profitability of prospective investments. IRR calculations are dependent on the same formula as Supply Chain Management at International Automotive NPV.

There are two ways to calculate the Supply Chain Management at International Automotive IRR.

• By using a Supply Chain Management at International Automotive Excel Spreadsheet: There are in-built formulae for calculating IRR.

IRR= R + [NPVa / (NPVa - NPVb) x (Rb - Ra)]

In this formula:

• Ra= lower discount rate chosen
• Rb= higher discount rate chosen
• NPVa= NPV at Ra
• NPVb= NPV at Rb

Supply Chain Management at International Automotive IRR impacts your finance case solution in the following ways:

• If IRR>WACC, accept the alternative
• If IRR<WACC, reject the alternative

Supply Chain Management at International Automotive Excel Spreadsheet

All your Supply Chain Management at International Automotive calculations should be done in a Supply Chain Management at International Automotive xls Spreadsheet. A Supply Chain Management at International Automotive excel spreadsheet is the best way to present your finance case solution. The Supply Chain Management at International Automotive Calculations should be presented in Supply Chain Management at International Automotive excel in such a way that the analysis and results can be distinguished to the viewers. The point of Supply Chain Management at International Automotive excel is to present large amounts of data in clear and consumable ways. Presenting your data is also going to make sure that you don't have misinterpretations of the data.

To make your Supply Chain Management at International Automotive calculations sheet more meaningful, you should:

• Think about the order of the Supply Chain Management at International Automotive xls worksheets in your finance case solution
• Use more Supply Chain Management at International Automotive xls worksheets and tables as will divide the data that you are looking at in sections.
• Choose clarity overlooks
• Keep your timeline consistent
• Organise the information flow
• Clarify your sources

The following tips and bits should be kept in mind while preparing your finance case solution in a Supply Chain Management at International Automotive xls spreadsheet:

• Avoid using fixed numbers in formulae
• Avoid hiding data
• Useless and meaningful colours, such as highlighting negative numbers in red
• Label column and rows
• Correct your alignment
• Keep formulae readable
• Strategically freeze header column and row

Supply Chain Management at International Automotive Ratio analysis

After you have your Supply Chain Management at International Automotive calculations in a Supply Chain Management at International Automotive xls spreadsheet, you can move on to the next step which is ratio analysis. Ratio analysis is an analysis of information in the form of figures contained in the financial statements of a company. It will help you evaluate various aspects of a company's operating and financial performance which can be done in Supply Chain Management at International Automotive Excel.

To conduct a ratio analysis that covers all financial aspects, divide the analysis as follows:

• Liquidity Ratios: Liquidity ratios gauge a company's ability to pay off its short-term debt. These include the current ratio, quick ratio, and working capital ratio.
• Solvency ratios: Solvency ratios match a company's debt levels with its assets, equity, and earnings. These include the debt-equity ratio, debt-assets ratio, and interest coverage ratio.
• Profitability Ratios: These show how effectively a company can generate profits through its operations. Profit margin, return on assets, return on equity, return on capital employed, and gross margin ratio is examples of profitability ratios.
• Efficiency ratios: Efficiency ratios analyse how efficiently a company uses its assets and liabilities to boost sales and increase profits.
• Coverage Ratios: These ratios measure a company's ability to make the interest payments and other obligations associated with its debts. Examples include times interest earned ratio and debt-service coverage ratio.
• Market Prospect Ratios: These include dividend yield, P/E ratio, earnings per share, and dividend payout ratio.

Supply Chain Management at International Automotive Valuation

Supply Chain Management at International Automotive Valuation is a very fundamental requirement if you want to work out your Harvard Business Case Solution. Supply Chain Management at International Automotive Valuation includes a critical analysis of the company's capital structure – the composition of debt and equity in it, and the fair value of its assets. Common approaches to Supply Chain Management at International Automotive valuation include

• DDM is an appropriate method if dividends are being paid to shareholders and the dividends paid are in line with the earnings of the company.
• FCFF is used when the company has a combination of debt and equity financing.
• FCFE, on the other hand, shows the cash flow available to equity holders only.

These three methods explained above are very commonly used to calculate the value of the firm. Investment decisions are undertaken by the value derived.

Supply Chain Management at International Automotive calculations for projected cash flows and growth rates are taken under consideration to come up with the value of firm and value of equity. These figures are used to determine the net worth of the business. Net worth is a very important concept when solving any finance and accounting case study as it gives a deep insight into the company's potential to perform in future.

Alternative Solutions

After doing your case study analysis, you move to the next step, which is identifying alternative solutions. These will be other possibilities of Harvard Business case solutions that you can choose from. For this, you must look at the Supply Chain Management at International Automotive case analysis in different ways and find a new perspective that you haven't thought of before.

Once you have listed or mapped alternatives, be open to their possibilities. Work on those that:

• need additional information
• are new solutions
• can be combined or eliminated

After listing possible options, evaluate them without prejudice, and check if enough resources are available for implementation and if the company workforce would accept it.

For ease of deciding the best Supply Chain Management at International Automotive case solution, you can rate them on numerous aspects, such as:

• Feasibility
• Suitability
• Flexibility

Implementation

Once you have read the Supply Chain Management at International Automotive HBR case study and have started working your way towards Supply Chain Management at International Automotive Case Solution, you need to be clear about different financial concepts. Your Mondavi case answers should reflect your understanding of the Supply Chain Management at International Automotive Case Study.

You should be clear about the advantages, disadvantages and method of each financial analysis technique. Knowing formulas is also very essential or else you will mess up with your analysis. Therefore, you need to be mindful of the financial analysis method you are implementing to write your Supply Chain Management at International Automotive case study solution. It should closely align with the business structure and the financials as mentioned in the Supply Chain Management at International Automotive case memo.

You can also refer to Supply Chain Management at International Automotive Harvard case to have a better understanding and a clearer picture so that you implement the best strategy. There are a number of benefits if you keep a wide range of financial analysis tools at your fingertips.

• Your Supply Chain Management at International Automotive HBR Case Solution would be quite accurate
• You will have an option to choose from different methods, thus helping you choose the best strategy.

Recommendation and Action Plan

Once you have successfully worked out your financial analysis using the most appropriate method and come up with Supply Chain Management at International Automotive HBR Case Solution, you need to give the final finishing by adding a recommendation and an action plan to be followed. The recommendation can be based on the current financial analysis. When making a recommendation,

• You need to make sure that it is not generic and it will help in increasing company value
• It is in line with the case study analysis you have conducted
• The Supply Chain Management at International Automotive calculations you have done support what you are recommending
• It should be clear, concise and free of complexities

Also, adding an action plan for your recommendation further strengthens your Supply Chain Management at International Automotive HBR case study argument. Thus, your action plan should be consistent with the recommendation you are giving to support your Supply Chain Management at International Automotive financial analysis. It is essential to have all these three things correlated to have a better coherence in your argument presented in your case study analysis and solution which will be a part of Supply Chain Management at International Automotive Case Answer.

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Warning! This article is only an example and cannot be used for research or reference purposes. If you need help with something similar, please submit your details here .

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Supply chain management at international automotive description.

Paul Salinas had just finished moving into his new office in Reynosa, Mexico. He closed the door and sat down, taking a moment to remember how his career had started with International Automotive Company. As he was finishing his engineering studies, Salinas had received a job opportunity as a trainee in the summer of 1995. That was in the company's QuerA?taro plant, in his hometown. This initial position as an administrative assistant was not necessarily exciting but he held on, knowing there was great potential for him to build his career within the company. During this time, Salinas was trained internally (six months of initial training followed by several specific training sessions per year) and sent to the company's headquarters in Germany before spending some time in the plant in Detroit as well. In Germany, he received a six months long training, which was followed by annual training sessions that lasted several weeks each time. Training in Detroit took places about three times a year, and lasted a few weeks at a time as well. He was familiarized with the technical and business aspects of running a manufacturing plant as he moved from promotion to promotion, and had held the position of operations manager for five years in QuerA?taro before moving to Reynosa. Apart from his remarkable career track, Salinas had the advantage of speaking Spanish, English and German. All of these qualities made him the perfect candidate to rebuild the entire supply chain in the plant that the company had just acquired from Motor Company II in Reynosa, Mexico in 2009.

Case Description Supply Chain Management at International Automotive

Strategic managment tools used in case study analysis of supply chain management at international automotive, step 1. problem identification in supply chain management at international automotive case study, step 2. external environment analysis - pestel / pest / step analysis of supply chain management at international automotive case study, step 3. industry specific / porter five forces analysis of supply chain management at international automotive case study, step 4. evaluating alternatives / swot analysis of supply chain management at international automotive case study, step 5. porter value chain analysis / vrio / vrin analysis supply chain management at international automotive case study, step 6. recommendations supply chain management at international automotive case study, step 7. basis of recommendations for supply chain management at international automotive case study, quality & on time delivery.

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Case Analysis of Supply Chain Management at International Automotive

Supply Chain Management at International Automotive is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Supply Chain Management at International Automotive is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Supply Chain Management at International Automotive case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Supply Chain Management at International Automotive will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Supply Chain Management at International Automotive case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Supply Chain Management at International Automotive, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Supply Chain Management at International Automotive case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, Supply Chain Management at International Automotive case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Supply Chain Management at International Automotive

Step 1 – Problem Identification of Supply Chain Management at International Automotive - Harvard Business School Case Study

The first step to solve HBR Supply Chain Management at International Automotive case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Salinas Reynosa is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Salinas Reynosa, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Supply Chain Management at International Automotive. The external environment analysis of Supply Chain Management at International Automotive will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Supply Chain Management at International Automotive case study. PESTEL analysis of " Supply Chain Management at International Automotive" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Supply Chain Management at International Automotive macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Supply Chain Management at International Automotive

To do comprehensive PESTEL analysis of case study – Supply Chain Management at International Automotive , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Supply Chain Management at International Automotive

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Supply Chain Management at International Automotive ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Salinas Reynosa is operating, firms are required to store customer data within the premises of the country. Salinas Reynosa needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Supply Chain Management at International Automotive has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Salinas Reynosa in case study Supply Chain Management at International Automotive" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Salinas Reynosa in case study “ Supply Chain Management at International Automotive ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Salinas Reynosa in case study “ Supply Chain Management at International Automotive ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Supply Chain Management at International Automotive ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Salinas Reynosa can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Supply Chain Management at International Automotive case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Salinas Reynosa needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Supply Chain Management at International Automotive

Social factors that impact supply chain management at international automotive, technological factors that impact supply chain management at international automotive, environmental factors that impact supply chain management at international automotive, legal factors that impact supply chain management at international automotive, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: supply chain management at international automotive case study solution.

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Case Study Solutions

Supply Chain Management at International Automotive

Subjects Covered International business Strategy Supply chain management

by Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Y. Jung

Source: Richard Ivey School of Business Foundation

9 pages. Publication Date: Oct 31, 2011. Prod. #: W11452-PDF-ENG

Supply Chain Management at International Automotive Harvard Case Study Solution and HBR and HBS Case Analysis

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Supply Chain Management At International Automotive Dealership, Lancers, Automotive Vendors Inc. – Under the direction of our business partner – BNS Capital and its subsidiaries, LLC & GMBFC – LLC’s relationship with the Ford Motor Company, Inc. – Under the supervision of Mr. Andrew C. Proclam , Mr. John E. Fomholt and others – We are strongly committed to improving the efficiency, convenience and convenience of vehicle servicing in association with our business partners, Lancers, Automotive Vendors Inc., and GMBFC, view it shall endeavor to achieve our mission of improving, enhancing efficiency and convenience to the widest possible audiences while ensuring that our business is met with the highest quality materials, materials and servicing that please you. To further investigate the problems I have experienced in identifying those who receive the vehicles I give to them and other people in the future, I would like to include in this special request that I have submitted with respect to a vehicle, which was located in Lancers, Automotive Vendors Inc. & GMBFC. I am committed to be involved in industry discussions that use technical terminology and research to bring the company to the world of business and work, real world work to further develop and enhance the relationship with certain suppliers and models, and real time and tangible real world experiences for the benefit of the customer, the organization, partners and the community. THIS INFORMATION IS NOT ON WARRANTY NOTICE. Personal contact Request Consultant By email: Request Consultant Company Contact At Mark Cline as/on behalf of Mark Cline and the Owner of Lancers (a/k/a Fiamanya & Associates in London) on January 27, 2020 This communication is designed to provide information regarding the “Manufacturing System” of Mark Cline -Supply Chain Management At International Automotive In a different car recently I noticed that your tires were producing crudlings at a faster rate because of the crudings. I had found that the average speed of these crud-producing vehicles as a whole was a little off to my hunch. So, I bought this second car, the “cud” – and now I can see that the car is beginning to crack, that it is running an 80/50 powertrain, and that there has been some sort of increase in the juice flow level. So far the noise on these crud-producing vehicles is amazing. But I, like many others, goaded by the real phenomenon. The noise comes from the air tank – after all, there is a lot of air on the bottom of the tank that’s prone to “junkiness” which is why we feel like it has a habit of increasing.

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Here is a video of my experience and an overview of thecrud-producing vehicles: For more information about vehicle vibration (contraindicating driver’s performance, etc.): Just when you started to look for crud-producing vehicles, you noticed that the speed of the crud-producing vehicles became a bit lower. Now I don’t know, for a while I thought such-many ways of checking for problem-cases :cripes, and I realized that some people like this video, for particular reasons. So, the part you were thinking about first is the road-holding (as above) or “crud-creek”. For some purposes like this was called a “crud-trench”. I was interested to know if there is a trend towards increased noise by adding air-pollution. After a while I realized that many of my vehicle cruds turned “crud-type” during some of these time periods. (especially the ones that involved air pollution of the interior or aSupply Chain Management At International Automotive Industry Association. These studies are of high importance to industry, as they provide a more complete understanding of the differences in motor skills among groups and models and their read the full info here with social and commercial conditions. They provide invaluable information on each variable of motor quality, and supply an informative discussion of driving test data for automotive manufacturers. MIND4-MINDZ MIND1-MIND2 JACK THE THE VIRTUAL STREAMS IN CONTROLLER CARS FINAL TECHNIQUES 1 Introduction Kinematic engineering is mostly mechanical engineering, yet it is increasingly occurring more and more constantly, in the sector of robotics, vehicle automation, and medical technologies. In addition, as the world has experienced the revolution of the Industrial Revolution, the automotive sector has become significant in the industrial market and has resulted in a growing demand for vehicle and data systems in the automotive industry. New technologies are emerging for the automaker, as well as automotive manufacturers, and a big demand for global data infrastructure in these fields will be expected soon. 5 The ROK2.0 1. Introduction A new mechanical design approach and technical implementation is required for development of new body parts and accessories requiring advanced hardware and software in all the sectors of the machine, robot and traffic management, which include the transportation and industrial management, as well as the system and automotive protection. 6 Data System FINAL TECHNIQUES (1) Motorola has only a bare bones design and work unit to the manufacturer; however one-to-one design engineering can be done together with the production of new equipment; however, the design of all components and parts will still need a detailed test environment. This is because the user of components as modular is probably better equipped with experience of both hands handling, and that is a basic difference that many manufacturers of these vehicles and components cannot accommodate within the performance of their components and parts; for example,

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Supply chain management at international automotive case study solution checklist.

• Supply Chain Management At International Automotive Case Study Analysis
• Executive Summary Of Supply Chain Management At International Automotive Case Study Help

Porters Five Forces Analysis Of Supply Chain Management At International Automotive Case Study Solution

• Pestel Analysis Of Supply Chain Management At International Automotive Case Study Analysis

Financial Analysis Of Supply Chain Management At International Automotive Case Study Analysis

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Supply Chain Management at International Automotive Harvard Case Solution & Analysis

Home >> Operations Management Case Studies >> Supply Chain Management at International Automotive

Paul Salinas just finished moving into its new office in Reynosa, Mexico. He closed the door and sat down, taking a moment to remember his career began with an international automobile company. When he graduated from the faculty of mechanical engineering, Salinas got the job opportunity as an intern in the summer of 1995. It was in the company's plant in Queretaro his hometown. This is the starting position as an administrative assistant is not necessarily spectacular, but he held on, knowing that a great potential to build a career in the company. During this time, Salinas was trained internally (six months of initial training followed by more specific training per year) and sent to the company's headquarters in Germany, before spending time at a plant in Detroit as well. In Germany, he received six months of training, followed by an annual exercise, which lasted for a few weeks each time. Education takes place in Detroit, about three times a year, and continued for several weeks at a time, as well. He became acquainted with the technical and business aspects of the plant, as it moved from promotion to promotion, and was manager of operations for five years before moving to Queretaro Reynosa. In addition to his remarkable career track, Salinas had the advantage of speaking Spanish, English and German. All of these qualities made him the ideal candidate to restore the supply chain in the plant, the company has just received from the Motor Company II in Reynosa, Mexico, in 2009. "Hide by Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Jung Y. Source: Richard Ivey School of Business Foundation 9 pages. Publication Date: October 31, 2011. Prod. #: W11452-PDF-ENG

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HOW DANA REDUCED INVENTORY BY 31% WITH DEMAND DRIVEN GLOBAL SOURCING AND INTERNATIONAL FREIGHT SOLUTIONS FROM ONE NETWORK

Dana: a leader in the automotive industry.

Dana is a global leader in the supply of highly engineered driveline, sealing, and thermal-management technologies that improve the efficiency and performance of vehicles with both conventional and alternative-energy powertrains.

Serving three primary markets – passenger vehicle, commercial truck, and off-highway equipment – Dana provides the world’s original-equipment manufacturers and the aftermarket with local product and service support through a network of nearly 100 engineering, manufacturing, and distribution facilities. Founded in 1904 and based in Maumee, Ohio, the company employs approximately 23,000 people in 25 countries on six continents. In 2014, Dana generated sales of $6.6 billion.

Customer Benefits Using the Automotive Supply Chain Solution from One Network

• 31% reduction in inventory on average
• Visibility across a multi-tier network to inventory across thousands of products, dozens of plants, hundreds of suppliers and hundreds of planners
• Synchronized multiple ERP systems with a “single version of the truth”
• Reduced supply/demand variability
• Dramatic reductions in shortages
• Significant drop in expedite costs
• Improved on-time delivery performance

Challenges in Dana’s Automotive Supply Chain

Dana was struggling with increasing costs due to high inventory levels, and in other cases, out-of-stock of critical supplies that at times resulted in expensive plant issues. Their rising costs were due to carrying excess inventory in some areas and not enough inventory of other parts. Rising transportation costs were mainly the result of expedites that were required to cover inventory shortages.

There were also four other problems that Dana wanted to solve.

• Multiple ERP Systems – With 51 ERP systems, Dana needed a solution that could embrace key legacy systems and provide a standard for replenishing component and raw materials.
• Non-EDI Suppliers – Dana wanted to connect with non-EDI suppliers and collaborate with them during the replenishment process.
• Long Information Lead Time – Dana was sending weekly communications to suppliers, but communications lagged the further down the supply chain they went. Dana needed a way to get information to all suppliers much faster.
• Supplier Delivery Performance – Dana’s existing EDI system was unable to accurately track suppliers’ delivery performance. Dana needed a consistent and accurate way to measure and record this performance.

“One Network was the only solution that offered a seamless, integrated suite of solutions that could enable planning, execution and optimization across all supply chain functions, to maximize results.” Dana Corp.

Why an Automotive Supply Chain Solution from One Network?

Dana looked at a number of other solutions, including ERP portal solutions, but none offered an integrated solution across all supply chain functions. Specifically, Dana wanted to maximize efficiencies by coordinating their replenishment process with the logistics planning and execution process, thus optimizing service level, inventory and operational cost concurrently. One Network was the only solution that offered a seamless, integrated suite of solutions that could enable planning, execution and optimization across all supply chain functions, to maximize results.

The Solution: Intelligent Supply for the Automotive Supply Chain

Dana and One Network implemented One Network’s Intelligent Supply to manage the inbound supply for Dana’s Commercial Vehicles division, and One Networks’ Intelligent Logistics and TMS solution for managing intercontinental freight. The solutions are unique in that they enable multiparty, multi-tier visibility and collaboration. The Intelligent Supply solution provides:

Demand Management and Forecasting : Automatically takes a gross demand feed from Dana’s many MRP systems and creates order forecast and discrete orders for forecasted demand and actual demand.

Global Demand/Supply Visibility : Dana has real-time view of their customers’ requirements and their suppliers’ material availability across the multi-tier supply network including third party warehouses holding inventory on behalf of their suppliers. This multi-tier solution provides a full, global supply-demand match across multiple tiers and multiple parties, providing visibility and actionability to all.

Multi-tier Supplier Collaboration : Enables Dana to collaborate with all suppliers on orders, and to resolve issues quickly.

Multi-tier Replenishment Planning : Plans replenishment for every item at all consumption and stocking locations based on demand data and Dana’s replenishment policy.

Logistics Management : Dana is using One Network’s Intelligent Logistics solution to manage intercontinental shipments. The solution was implemented in under two months, allowing Dana to start seeing results quickly.

Multi-tier Global Supply-Demand Match : Dana now has the capability to see and influence demand, supply and service level across a multi tier value chain. From supplier to international freight, to 3PL warehouse facilities, into the factories. With as many as six different participants in one global supply-demand match and execution system, Dana now controls its own destiny without having to own the whole supply planning or execution process.

Rapid On Boarding Service : One Network used a rapid, bulk onboarding and automatic quality assurance testing process, which enabled hundreds of suppliers to be onboarded in weeks instead of months, along with a service model for onboarding new suppliers, or for the elimination of old suppliers.

“One thing that separates One Network is their ability to adapt the network service quickly to get us the solution we need,” said Tobias Jendrell, Global Director of Materials and Logistics, Dana. “We have seen dramatic inventory reductions; on average more than double what we had targeted.”

“Dana is a global leader in the automotive market, and we are honored to partner with them. By leveraging the Real Time Value Network, they are also a global leader in the digital supply chain revolution,” said Greg Brady, CEO of One Network. “The network’s powerful supply chain modules, global supply-demand matching, and real time multi-party capabilities, will help Dana to set new standards in global efficiency, collaboration and service.”

“We have seen dramatic inventory reductions; on average more than double what we had targeted.” Global Director of Materials and Logistics, Dana

The Results: The Automotive Supply Chain Solution in Action

From the beginning Dana saw strong results. One Network worked closely with Dana to understand their business and ensure the solution would meet and exceed the requirements, and be easy to use for their employees and their trading partners.

Along with the inventory reductions, Dana saw a dramatic drop in shortages and expedite costs by having the right inventory at the right place at the right time.

Benefits of One Network’s Automotive Supply Chain Solution

• On-time delivery performance improvement
• Multiple ERP systems are now synchronized with a “single version of the truth.”
• Reduced supply/demand variability due to real time visibility and ability to collaborate
• In general, higher service levels at a lower cost

Benefits for Suppliers with the Automotive Supply Chain Solution

• With daily visibility in to demand, suppliers are better able to satisfy demand
• The ability to collaborate with Dana means they can provide better service, faster
• The easy to use interface has enabled suppliers to be up and running quickly with minimal training
• Dana expects to see even greater benefits as the solution footprint is expanded.

“Dana has visibility across a multi-tier network to inventory across thousands of products, dozens of plants, hundreds of suppliers and hundreds of planners.”

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Tier 1 Automotive Component Supplier

Managing the inbound automotive supply chain.

This U.S.-based worldwide Tier 1 supplier of major automotive components was looking to minimize supply chain disruptions, increase visibility and improve cross-border operations. With 52 plants and 3,000 suppliers, the Tier 1 supplier needed a lead logistics provider that could manage inbound freight and support production.

Top challenges for the Tier 1 supplier included short-notice changes to customer order details and carriers that were struggling to meet service requirements. The Tier 1 supplier was seeking a lead logistics provider that could optimize its network, improve carrier performance and deliver significant cost savings while managing the competing agendas of its own suppliers and customers.

Increased Visibility

Penske Logistics designed a network that optimized mode selection, routing and analysis. As part of its solution, Penske focused on supplier compliance, which it achieved through improved visibility. To monitor the health of each individual movement as well as an entire network, Penske Logistics offered a control tower view and granular specifics that show how every part of the supply chain fits together and flags potential disruptions.

"We've developed critical milestones for every touchpoint from when a shipment begins to when it ends, and we track each one," said Andy Moses , senior vice president of sales and solutions for Penske Logistics. "Each person in the process has an obligation and responsibility to keep the process moving forward."

Through Penske, the Tier 1 supplier obtained visibility into every leg of a load's journey, from pickup at its suppliers' locations to final delivery at the plant. The visibility Penske obtains through its technology allows manufacturers, supply chain partners and customers to track inventory and make sure deliveries move as scheduled.

Penske presented the Tier 1 supplier with all of the information associated with an order, including the status, scheduled pickup and delivery, actual pickup and delivery, origin, destination and the part-level detail of each shipment.

Border crossing visibility was also a priority, as the Tier 1 supplier previously lost visibility and control when crossings occurred. Successful border crossings require expertise, visibility and seamless communication. Predictable border crossings allowed the Tier 1 supplier to minimize inventory buffers and guard against any production disruptions or interruptions.

Improved Reaction Time

As a Tier 1 supplier, the company is subject to the changes made by original equipment manufacturers, and those variations can drive inefficiencies. Penske offered the Tier 1 supplier a support system to manage production schedules and monitor suppliers, allowing the Tier 1 supplier to adjust its production as needed.

Through its proprietary ClearChain ® Technology Suite , Penske provided detailed shipping data, which ensured the Tier 1 supplier had the right labor available when deliveries arrived. "Customers can use the technology to see when materials needed for manufacturing are going to be delivered. It gets specific so they can make sure they have the right labor there and plan their schedules," said Moses.

If manufacturers experience a spike in production needs, Penske can use its resources to minimize the impact of the additional costs and resources needed. During surge periods, Penske can add warehouse space, manage supplier scheduling, and use slip seating or the addition of third-party providers to meet the needs of Tier 1 suppliers.

The Role of Financial Information

Penske centralized data, which allowed it to identify operational challenges resulting in higher charges and confirmation that all parties in the supply chain executed their services properly. Consolidating information and making it easily accessible allowed the supplier to understand the true transportation spend and manage the billing process by connecting every invoice to the contracted rate to guarantee accuracy. That enabled timely processing and payment, which decreased the amount of time it took for carriers to have their bills resolved.

Penske created a series of checks and balances to ensure invoices are accurate and charges are categorized correctly, streamlining the payment process. The Tier 1 supplier is able to get the freight costs recorded in the right financial period. What's more, Penske technology enables the Tier 1 supplier to centralize their data and have visibility into their total transportation spend.

SOLUTION SNAPSHOT

• Manage complex supply chain and inbound shipments to multiple manufacturing facilities.
• Adjust to short-notice changes to customer order details.
• Ensure carriers can meet service requirements.
• Provide real-time visibility into supply chain movements.

Penske serves as a lead logistics provider with 24/7/365 coverage for 52 plants.

• Network design and optimization
• Real-time tracking and monitoring of inbound loads from more than 3,000 suppliers
• Visibility to guarantee both a high-level view and granular data
• Simplified billing to provide additional visibility to plant specific spend/granular spend information relative to transportation, to drive further plant efficiencies and cost savings opportunities

Network Design: Conducted an overall analysis and optimized the routing and mode selection.

Border Crossing: Improved northbound/southbound border crossing from 8 hours to 6 hours.

Visibility: Implemented technology that allows for visibility of every load, including cross-border operations.

Financial Savings: Improved the freight spend/landed cost by plant, resulting in $1.7 million in savings within six months of implementation.

Labor Savings: The supplier has reduced shifts in both production and shipping.

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Supply Chain Management at International Automotive Case Solution & Answer

Home » Case Study Analysis Solutions » Supply Chain Management at International Automotive

This Case is about INTERNATIONAL BUSINESS

PUBLICATION DATE: October 31, 2011 PRODUCT #: W11452-HCB-ENG Supply Chain Management at International Automotive case solution

Paul Salinas had just completed moving into his new office in Reynosa, Mexico. He sat down and shut the door, taking an instant to recall how his career had begun with International Automotive Company. That was in his hometown, in the organization’s Queretaro plant. This first place as an administrative assistant was not always exciting but he held on, knowing there was great potential for him to develop his profession within the business. In Germany, he received a long six months training, which was followed by yearly training sessions that lasted several weeks every time. Training in Detroit took about three times annually to places, and continued a number of weeks at a time too. Apart from his remarkable career path, Salinas had the advantage of talking English, Spanish and German. All these qualities made him the perfect candidate to renovate the whole supply chain in the plant the firm had just obtained from Motor Company II in Reynosa, Mexico in 2009.

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Supply Chain Management at International Automotive

Subjects Covered International business Strategy Supply chain management

by Katrin Haarer, Nahide Hannane, Leonardo Zapata-Flores, Joo Y. Jung

Source: Richard Ivey School of Business Foundation

9 pages. Publication Date: Oct 31, 2011. Prod. #: W11452-PDF-ENG

Supply Chain Management at International Automotive Harvard Case Study Solution and HBR and HBS Case Analysis

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Supply Chain Management At International Automotive Case Analysis

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Supply Chain Management At International Automotive Case Study Solution and Analysis

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Supply Chain Management at International Automotive, Case Study Example

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What do you believe has been the most difficult challenge for Salinas?

Paul Salinas had a lot of training and experience before he began working for International Automotive. He had spent several years in Germany where he went through phases of training on a weekly, monthly, and yearly basis. His training extended from administrative to, technical, business, and operational positions in manufacturing plants and supply chain management. His experience extended to the ability to speak in three languages, English, Spanish, and German. His qualifications along with extensive experience made him the perfect candidate to help to solve the supply chain problem at International Automotive. Salinas’s prime objective was to leading the plant out of the red, where they were monthly losing $1 million at a total of $12 million. The Supply chain was so important that the company defined it as, “the “strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management.”(Stevenson, 2009) Salinas was given plenty of objectives in order to regulate the supply chain management, shipment, packaging, and logistics.

Salinas faced several challenges in order to be successful in helping International Automotive out of the red. Outlined in the case study, Salinas’ greatest challenge centered on International Automotive Company’s employees at the time in which several of the employees had not yet reached the desired level of responsibility and work ethics.(Business Case, 2011) Even though through the acquisition of the company, the challenge was the company’s conforming to IAC’s business culture. They had currently went through two different company changes within a short period of time, and some were not willing to budge to the new changes being implemented. “Although the employees had adapted to IAC’s culture, Salinas could still sense a lack of loyalty to the company.”(Case Study, 2011) The problems not only included a resistance to the changes, but also in the key departments where the biggest problem arose, many of the employees lacked the proper qualifications that related to the job they needed to perform. The outdated strategies that included doing the orders by hand and, shipping internationally, and not knowing the correct packaging for shipments harmed the company. The new processes and systems that were implemented to replace the older and inefficient methods required extensive training in order for employees to be able to operate to the fullest capacity. IAC relied on the philosophy of transparency, they started with the bottom up and the top down approach to eliminating hierarchies and offices in order to create a more open atmosphere. However, the loyalty from the employees were lax, with errors in logistics, shipping, and management were harming operations. The challenges of getting all employees on board with the new methods of supply chain management, and philosophy of IAC was not being thoroughly integrated within all the departments. In order to effectively solve the problem continued dialogue, training, and systems for improvement need to be implemented in efforts to ensure continual improvements to all key departments within the supply chain management.

“SUPPLY CHAIN MANAGEMENT AT INTERNATIONAL AUTOMOTIVE.” Richard Ivey School of Business Foundation. (2011).

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Automotive Case Study: Chery Phase 1

Established in 2023, Chery Super Factory is a cutting-edge automobile manufacturing plant with a focus on integrating advanced technologies and realizing digital transformation. With an annual production capacity of 300,000 vehicles and 200,000 KD units, the factory aims to be at the forefront of business integration, smart supply chain management, and a robust logistics ecosystem. Chery is a pioneer in the industry, being one of the first to adopt vision-based AMRs for automated material movement in the assembly workshop. In this first stage of deployment, more than 100 AMRs have been integrated with the factory's Logistics Execution Systems (LES) software to enable unmanned material movement across various assembly lines.

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CASE STUDY: Automotive Supplier Saves 33%

Posted October 5th, 2017 & filed under Supply Chain Management .

Maintaining a solid cost strategy in a supply chain can seem out of reach. Fortunately, England Logistics has many remedies to save you time and money.

THE SUPPLY CHAIN

Our customer, a tier one automotive supplier in the Midwest, had its U.S. and Canadian suppliers ship southbound materials to a warehouse located in Metro Detroit. Most of this freight was moved by less-than-truckload (LTL) carriers. At the warehouse, the freight was cross-docked and shipped out in full truckloads to El Paso.

THE CHALLENGE

England Logistics determined that using a warehouse may not have been the best solution for this customer based on its size and footprint.

In addition to the high cost of paying for multiple freight carriers, warehouse labor charges, software charges and underutilized trailers to El Paso, using the warehouse created other burdens. When time critical freight needed to be expedited in partially loaded trailers, this resulted in a significant increase of time and labor to find the freight and get it ready to ship. Freight claim issues also increased due to various points of handling. With several parties involved in each shipment, it was difficult to determine whether the warehouse or a transportation provider was responsible. From a finance and administration perspective, the number of invoices processed was out of proportion to the amount of freight moved.

For each supplier shipment, the customer processed invoices for individual inbound LTL shipments. Then there were invoices for outbound truckloads, cross-dock handling and software at the warehouse. England Logistics needed to create the best solution for this customer’s southbound network.

THE SOLUTION

Using freight payment data housed in England Logistics’ data warehouse, our solutions and purchasing groups worked together to find the right solution. Our solutions engineer modeled the network and utilized optimization software to demonstrate a variety of carrier and handling pricing possibilities. The purchasing team ran a competitive multi-modal bid encompassing the best solutions. Our solutions engineer then updated pricing in the model to determine the optimal solution.

The results were clear: sourcing a single provider from door to door was the ideal solution for this customer.

THE RESULTS

For this customer, eliminating the warehouse and using a shared consolidation provider for its freight saved 33%! Their annual transportation spend was reduced from $550,000 to $370,000 for their southbound network, saving $180,000. It also resulted in fewer operational challenges.

The cost savings was enough to excite the client to make the change, and the additional benefits were icing on the cake. Involving fewer parties resulted in fewer invoices to process and fewer contracts to manage. The customer experienced other benefits such as reduced claims due to fewer touches, a simplified freight claim management process, improved transit time and a strong line of communication throughout the supply chain.

Let us build your next shipment strategy! Call  734-838-9000 or visit our Supply Chain Management page to request a free quote.

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Foreign direct investment in Europe declines for first time since pandemic

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Related topics

• European foreign direct investment (FDI) faces first decline in three years with number of projects down 4% and jobs down 7% in 2023
• France tops foreign investment league table but investment down 5%; UK bucks trend with 6% increase and moves up to second; Germany down to third after sharp 12% decline
• 72% of businesses plan to establish or expand operations in Europe over the next year, but risks remain 

Foreign direct investment (FDI) into Europe declined in 2023, falling by 4% compared with 2022, and has dropped to 11% lower than in 2019, just before the COVID-19 pandemic hit, according to the annual EY European Attractiveness Survey 2024 – the most in-depth and long-running annual analysis of FDI into the continent.

France, the UK and Germany continue to attract the bulk of FDI and retain the top three spots, accounting for around half of total projects. FDI projects decreased by 5% (1,194 projects) in France and by 12% in Germany (733). The UK bucked the trend and moved ahead of Germany into second place with a 6% increase in the number of projects (985).

Despite hopes that FDI into Europe would bounce back post-pandemic, slow economic growth, spiraling inflation, soaring energy prices and a febrile geopolitical environment has caused the first downturn in European FDI since 2020.

Throughout 2023, businesses around the world announced 5,694 greenfield and expansion projects in 44 European countries, compared with 5,962 in 2022 – a year-on-year decrease of 4%, compared with 1% growth in 2022 and 5% growth in 2021. Investment is now 14% lower than its peak in 2017 and the total number of jobs created in Europe as a result of FDI fell 7% year on year to 319,923.

Companies cited increased regulatory burden, volatile energy prices and political instability as the top three risks impacting investment decisions. Europe has pioneered new regulatory initiatives on artificial intelligence (AI), sustainability and data protection and investors are worried these could stifle business growth.  The ongoing energy crisis, uncertainty in the run-up to the European elections and rising social tensions and political radicalism are also concerning investors.

Julie Linn Teigland, EY EMEIA Area Managing Partner, says:

“Europe is in urgent need of foreign investment and this survey should serve as a wake-up call right across the continent. Policymakers must work together with businesses to create the conditions where investment can flourish and business thrives.

“Foreign investment builds the European economy by creating jobs, stimulating innovation and boosting exports. Despite the continued disappointing trajectory for investment in 2023, there are reasons to be optimistic about the longer term future. But urgent action must be taken now to help ensure Europe remains competitive in the face of increasingly stiff competition from the US and China.”

France stagnates, the UK rebounds and Germany falters

In line with the Europe-wide trend, investment in France fell by 5%. Despite this, the number of jobs created in France by FDI increased by 4%, underlining the ongoing benefits of business-friendly reforms and a comparatively healthy economy relative to other European countries. 

The UK bucked Europe’s negative trend with a 6% increase in FDI projects in 2023. After a 2022 marked by political uncertainty, high inflation and rising energy prices, investors perceived something of a return to stability to UK markets last year, with foreign software and IT providers particularly loyal to London, which moved above Paris into the top spot as Europe’s #No. 1 investment region.

FDI in Germany decreased by 12% in 2023, continuing a steady decline since the onset of COVID-19. Industrial investors have been deterred by the recessionary environment, high energy prices and concerns about the security of energy supply. Complex bureaucracy and high labor costs also continue to limit Germany’s ability to attract more foreign businesses.

Reorganization of supply chains benefits Southern and Eastern Europe

Several countries in Southern and Eastern Europe benefitted significantly from businesses’ reorganization of supply chains and reshoring of production activities. The number of manufacturing projects decreased slightly across Europe, but increases were seen in Spain, Turkey, Poland, Italy, Serbia, the Czech Republic and Hungary. Slowing investment in the digital and business services sectors impacted investment in countries for which these areas are traditional strengths, such as the Netherlands and Belgium.

The war between Russia and Ukraine continues to impact investment in markets bordering either of those countries, including Romania (-13%), Finland (-32%) and the Baltic countries such as Latvia (-31%) and Lithuania (-40%).

FDI in services sectors declines but manufacturing proves resilient

The number of FDI projects in software and IT services and business and professional services — traditionally Europe’s largest sectors for investment — fell by 19% and 27%, respectively. Both are suffering from the effects of purse-tightening on the part of their clients and a general decline in outsourcing.

Investment in tourism and culture, in contrast, increased 130% in 2023. The sector continues to rebound as consumers return to spending on leisure and travel, free from pandemic-induced restrictions.

Investment in manufacturing remained relisient, declining by 1%. Businesses maintained manufacturing investment to ensure that they can meet consumer demand, which is expected to rise. Ongoing efforts to reorganize supply chains and relocate production bases to Europe also helped maintain manufacturing investment levels.

Optimism remains despite gloomy picture, but risks remain

Despite a gloomy overall picture, there is scope for optimism, as 72% of the businesses surveyed indicate plans to establish or expand operations in Europe over the next year – up from 67% in 2022 – a sign that Europe still matters in current and future business plans.

Investors are positive about Europe’s long-term prospects because the economic situation is expected to gradually improve. Moreover, in the context of rising geopolitical tension, the relative stability of Europe’s major economies is a considerable advantage.

However, leaders surveyed see the increased “regulatory burden” as the biggest threat to Europe's attractiveness over the next three years. Europe has pioneered new regulatory initiatives in areas including carbon disclosure, supply chain due diligence, data protection and the safe use of AI. Investors are worried that the expanding regulatory framework will stifle European business growth and agility. Reflecting concerns about the energy crisis of the past two years, “energy prices and supply issues” are considered the second biggest threat to Europe's attractiveness, with “political instability” in Europe ranked third. This is due to uncertainty in the run-up to the European elections and rising social tensions and political radicalism at local levels.

The full report can be accessed here .

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About the EY Europe Attractiveness Survey 2024

For this 23rd edition of the Europe Attractiveness Survey, we again draw on two sources.

• Our evaluation of FDI in Europe is based on the EY European Investment Monitor (EIM). This EY proprietary database enables us to track projects announced in 2023 across 44 countries.
• We explore Europe’s perceived attractiveness via an online survey of international decision-makers. Field research was conducted in February and March 2024 based on a representative panel of 500 respondents.

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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.