North America’s vehicle sales in April shows that the fluctuating demand experienced within the automotive industry can lead to potential supply chain turbulence. According to emergency logistics expert from Evolution Time Critical, increased inventories, production rescheduling, and subsequent supply chain ramification are all possible side effects of the fluctuating demand faced by the U.S. this year.

This happens because optimized production is the ideal and more cost effective for manufacturers and supply chain professionals; however, during a period of unpredictable sales high inventory levels are necessary. “Reducing production is one way of controlling inventory, but the knock-on effects of fluctuation in demand can negatively impact the ability of suppliers to respond when stepping back up to full production,” explains Evolution Time Critical managing director, Brad Brennan.

Brennan completes saying that “the United States traditionally reaches a new car sales peak in summer, but if the ability to maintain full production is not safeguarded then affected manufacturers may find it difficult to ramp up production in time, meet original targets, or clear inventory ahead of new model launches in autumn.”

According to forecast, automobile production in early 2017 has matched demand only when it was at its highest point for many manufacturers, and the managing director says that the lean production strategies used by the automotive industry mean that inventory levels should remain at a more manageable level than five years ago. “The significance of the supply chain and its role in enabling higher -risk, flexible strategies has been embraced by vehicle manufacturers, who are now more prepared to safeguard longer-term operational efficiency in the face of challenges such as demand fluctuation – an agile emergency logistics partner is able to analyze the entire supply chain for solutions that can provide a crucial time advantage for any increase in production and safeguard operations. This realization has inspired the establishment of our new Atlanta control center”, completes Brennan.

Source: Inbound Logistics

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