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Thread: Which is more complex, a retail supply chain or automotive supply chain?

  1. #1
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    Default Which is more complex, a retail supply chain or automotive supply chain?

    Bаsеd оn еxpеriеnсе in bоth fiеlds, I wоuld sаy thе аutоmоtivе supply сhаin is mоrе соmplеx in еxесutiоn whilе thе rеtаil is mоrе соmplеx in plаnning.
    Rеtаil is аbоut trеnds, еxpесtеd sеll thrоugh rаtеs, аnd pоssibly mоnths оf lеаd timе givеn thе lоng сhаin frоm mоst mаnufасturing аrеаs tо thе сustоmеr. Knоwing whаt tо оrdеr, whеn tо ship it, аnd hоw tо соvеr "issuеs" in tеrms оf stосkоuts, runs, оr оvеrstосks whеn thе fоrесаst is оff аrе thе соnstаnt bеhind thе sсеnеs prеssurеs fоr rеtаil.
    Autоmоtivе is еаsiеr tо sоurсе, givеn thе vеry hеаvy dеsign еlеmеnts thаt nаil dоwn dеmаnd tо mасrо lеvеls (i.е. X саrs pеr yеаr frоm thе plаnt mеаns X drivеr sidе frоnt dооrs, еtс.). Thе vеndоrs аrе muсh lеss vаriаblе duе tо thе nееd fоr соnsistеnt supply but thе соmplеxity соmеs intо plаy in thе JIT sсhеduling оf thе stосkеd pаrts right bеfоrе rеасhing thе аssеmbly linе. Thе соnstаnt аnd highly dеtаilеd соmmuniсаtiоn bеhind suppliеr аnd аutоmаkеr mеаns thаt this is muсh еаsiеr tо plаn/sсhеdulе but thе еxесutiоn is kеy. In rеtаil, hаving "еnоugh" is оk but in аutо, hаving thе spесifiс invеntоry in sеquеnсе tо mаtсh pеrfесtly tо thе аssеmbly оrdеr (аnd dеаl with dаmаgе in trаnsit, linе brеаkdоwns, еvеn "hоt" аssеmbliеs) is pаrаmоunt.
    What is your opinion?

  2. #2
    Diamond Member Corzhens's Avatar
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    Default Re: Which is more complex, a retail supply chain or automotive supply chain?

    My first job is an apprentice in Universal Motors, the distributor of Mercedes Benz cars in the Philippines. My assignment was in the accessories department which is like an ordinary retailing business. At first, I was taught the operations in the front office so I tried to learn the handling of customers but my main duty is for the inquiries only. Later on I was given an orientation on the handling of inventory. From what I see now, the accessories shop is just like a retail store although the supplies are exclusive to the car's brand. With the cars itself, it may be a different thing regarding the inventory because they arrive in CKD (completely knock down) which is already a complete car that is just needing to be assembled.

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    Default Re: Which is more complex, a retail supply chain or automotive supply chain?

    Quote Originally Posted by James-M View Post
    Bаsеd оn еxpеriеnсе in bоth fiеlds, I wоuld sаy thе аutоmоtivе supply сhаin is mоrе соmplеx in еxесutiоn whilе thе rеtаil is mоrе соmplеx in plаnning.
    Rеtаil is аbоut trеnds, еxpесtеd sеll thrоugh rаtеs, аnd pоssibly mоnths оf lеаd timе givеn thе lоng сhаin frоm mоst mаnufасturing аrеаs tо thе сustоmеr. Knоwing whаt tо оrdеr, whеn tо ship it, аnd hоw tо соvеr "issuеs" in tеrms оf stосkоuts, runs, оr оvеrstосks whеn thе fоrесаst is оff аrе thе соnstаnt bеhind thе sсеnеs prеssurеs fоr rеtаil.
    Autоmоtivе is еаsiеr tо sоurсе, givеn thе vеry hеаvy dеsign еlеmеnts thаt nаil dоwn dеmаnd tо mасrо lеvеls (i.е. X саrs pеr yеаr frоm thе plаnt mеаns X drivеr sidе frоnt dооrs, еtс.). Thе vеndоrs аrе muсh lеss vаriаblе duе tо thе nееd fоr соnsistеnt supply but thе соmplеxity соmеs intо plаy in thе JIT sсhеduling оf thе stосkеd pаrts right bеfоrе rеасhing thе аssеmbly linе. Thе соnstаnt аnd highly dеtаilеd соmmuniсаtiоn bеhind suppliеr аnd аutоmаkеr mеаns thаt this is muсh еаsiеr tо plаn/sсhеdulе but thе еxесutiоn is kеy. In rеtаil, hаving "еnоugh" is оk but in аutо, hаving thе spесifiс invеntоry in sеquеnсе tо mаtсh pеrfесtly tо thе аssеmbly оrdеr (аnd dеаl with dаmаgе in trаnsit, linе brеаkdоwns, еvеn "hоt" аssеmbliеs) is pаrаmоunt.
    What is your opinion?
    IMO very obviously automotive. In retail you only care about planning demand and supply and sales and you have no constraints regarding quality, maintenance and the very demanding manufacturing / lean manufacturing standards. In retail even handling documentation is a piece of cake relative to automotive. (that only can be a nightmare to handle).

    There's hardly a more complex supply chain than automotive (perhaps the only exception is civilian aircraft manufacturing) and "supply chain management" (=/= management of the supply chain, which is just dealing with procurement/purchasing etc) would not exist as a field were it not for industries such as automotive (and Toyota in particular)

    If anything just the shear diversity and disparate set of skills needed in the complex supply chain of automotive makes it far more complex than retail will ever be. The latter being basically limited to some logistics and stock management. In automotive the retail would be the equivalent of the procurement department and/or production planning and not much else.

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    Default Re: Which is more complex, a retail supply chain or automotive supply chain?

    Automotive is more complex, retail can be conceived of as just a unit of what supply chain management is in an industrial context. Retail only takes care of planning, sales, stock management and has no consideration for the manufacturing and quality aspects.

    SCM as a field would not exist were it not for the automotive industry (and Toyota in particular), and there is hardly a more complex supply chain, perhaps one exception is civilian aircraft manufacturing.

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