The New Flexibility

Posted By
Tim J. Clark
Senior Vice President, Supply Chain Management

How the ever-evolving vehicle is changing the supply chain that supports it.

As we watch the remarkable transformation of traditionally built vehicles into software-defined platforms, it’s equally notable to see how this evolution is affecting the supply chain. Significant change is underway, and it’s changing the way Aptiv supplies our customers, as much as the way our customers are building their cars.

The factors driving this change are easy to spot. We’ve seen an emergence and significant continued electrification of the automotive space. Components such as semiconductors and printed circuit boards are increasingly critical to the functionality of the vehicle, becoming as important as the engines and transmissions of the past. With this emergence comes greater sophistication and complexity, not to mention more technology partners, more vendors, and, ultimately, a much larger ecosystem to manage.

As cars are evolving, so too are the supply chain and manufacturing processes that produce them.  

The integrated manufacturing, distribution and supply chain of the future.

Increasingly the four walls of the factory have become ground zero for a highly coordinated logistics and operations network that has to come together seamlessly. Why? Because the only clear path forward for the software-defined vehicles of the future is through smarter, more flexible factories, supported by a more dynamic logistics network.

Aptiv is way past the historical industry bias toward producing everything in-house. We are expanding our contract manufacturing footprint, while also significantly increasing automation in our own factories, to improve flexibility and meet stringent performance expectations. In these factories, global, real-time data and analytics quickly identifies performance opportunities, and highly configurable cells allow equipment to perform multiple functions.

But these factories need something else, too: A more dynamic logistics network that serves both suppliers and customers. On the demand side, this network needs to allow for earlier engagement in concepting and design, access to accurate, real-time demand information, and simplified interfaces. On the supply side, it needs to enable better product readiness at the SOP date, improved on-time delivery and greater automation to reduce cost-to-serve.

The new flexibility: automation in action.

We know our customers’ challenges impacting the traditional manufacturing approach. Component miniaturization and increased wire density. The stringent quality expectations of today’s electrical architectures. The investment that come with a more highly-qualified labor force.

Applying an Industry 4.0 toolset creates the more automated, data-driven manufacturing environment required to meet the ever increasing expectations of our customers, accelerating development and improving built-in quality. Take Zero Defect Agile Manufacturing, for example. It’s a major initiative Aptiv has undertaken to improve our quality and lower our costs.

The foundation for this agile manufacturing process is a digitally connected value chain in the plant to monitor real time performance and drive efficiency. Why is this so important? Because with this system in place, we’re able to seamlessly switch from custom to small batch to mass batch orders, whenever customer needs demand it.

This type of new flexibility allows Aptiv to handle customer-required design and mix changes in hours, not weeks. Even better, this process is quickly transferable from one location to another, with a high percentage of capital reutilization and standardization. This is not just flexibility; this is the New Flexibility that underscores Aptiv’s position as a Tier Zero manufacturing partner to our most technologically advanced customers.

Sustainability comes to the supply chain.

When Aptiv talks about being Sustainable by Design, we can point to our global Integrated Supply Chain – encompassing both sourcing and manufacturing – which we have designed to be flexible and sustainable in any environment. This is a major benefit for our customers and one that we are continuously improving upon.

Our legacy of execution is being enhanced to accommodate future platforms, leveraging our scale and brand with key suppliers, while ensuring leading edge technology at the best possible cost and commercial terms for Aptiv. It’s smart. It’s proven. And, perhaps most importantly, it’s one more sustainable path forward for Aptiv and our customers.