Car makers team up to steer clear of supply chain risk

Aston Martin, Jaguar Land Rover and Toyota Motor Europe worked with the owner of Goodwood, Lord March, and supply chain management company Achilles, to develop a three-step solution to identify and manage potential supply chain risks. The solution comprises three elements: * An online portal, accessible to buyers and suppliers, giving up-to-date information about the supply chain. The OEMs have come up with a standardised set of questions for all suppliers – including health and safety, compliance, financial stability, etc – so potential suppliers will only need to complete one questionnaire to be considered by all three manufacturers. * Supply chain mapping tool, allowing OEMs to see information on sub supply chains, including those supplier manufacturing sites which are most at risk from natural disasters. The tool also highlights potential bottlenecks, reliance on single suppliers and companies with long lead times. Tier 1 suppliers are now being invited to provide information and to cascade the requirement * A financial analysis model, which will enable the OEMs to carry out financial health checks on suppliers. The OEMs have agreed that, in today's global market, one supplier issue could affect them all, so they agreed to work together to mitigate risk. The supplier information management system is hosted by Achilles. Luis Olivié, the software firm's global business development director, said: "This technology will enable OEMs to map and understand their own supply chains right through the many tiers. It will allow them to see the interaction and dynamics of them, and risk assess in a way that has never been done before... With the benefit of an integrated supply chain, OEMs can put in place additional contingency measures to aid continuous production." Gary Archer, Aston Martin's purchasing director and chairman of the Achilles automotive steering group, described the move as "an exciting new initiative", adding that this would remove the burden on suppliers to comply with multiple requests from each of the OEMs involved, as well as enabling them to promote their capability to the other manufacturers. Achilles Automotive will be jointly funded by OEMs and suppliers, he added, "which we believe fairly recognises the benefits to all parties". Ian Harnett, JLR's purchasing director, commented: "Achilles Automotive will deliver greater efficiency, not only to JLR but to the whole automotive industry through the creation of a standard process of managing supplier information and keeping information current and up-to-date." Guillaume Jacques, Toyota's purchasing general manager, added: "Recent events, such as the Japan earthquake, Thailand flood, and smaller scale issues such as fires at supplier premises showed us that we needed to address potential supply risks deep in our supply chain and had to extend risk management from tier 1 level to lower tiers."