It’s been over a year since the COVID-19 pandemic began wreaking havoc on supply chains. But as the auto industry looks to bounce back from a challenging 2020, component shortages have brought many plants to a halt.
The semiconductor shortage has caused manufacturers large and small to slow production or even stop assembly lines entirely, and consulting firm AlixPartners estimates it will cost the global automotive industry $110 billion in 2021. Many analysts characterize the semiconductor shortage not as a one-off occurrence, but a sign of the times, identifying raw materials, petroleum-based products, parts for electric batteries, and motors as candidates for future scarcity.
To limit potential disruption, supply chains must now add an element of “just-in-case” planning to their lean just-in-time operations, such as stockpiling inventory and building redundancy among suppliers. But with tight margins and intense competition, how can automotive supply chains remain cost-conscious and efficient?
Store extra inventory more efficiently
Stockpiling extra inventory can help guard against disruption due to shortages, but all that inventory has to go somewhere. Problem is, industrial real estate rates keep rising and the construction industry faces a shortage of its own, driving the cost of new storage space higher.
The question becomes, how can you make the most efficient use of the space you already have? An automated storage and retrieval system (AS/RS) can take advantage of your facility’s full cubic volume, utilizing extremely dense racking and storage locations at greater heights to make the most of vertical space. It all adds up to greater storage capacity in the same square footage.
Improve Labor Performance and retention
For automotive supply chains striving for resiliency and profitability, improving employee performance and retention is critical. In 2020, turnover in U.S.-based manufacturing was higher than ever and the cost of such high churn can add up quickly – to the tune of over $4,000 per hire.
A major academic study called The Augmented Human Enterprise found that workplaces augmented by automation are 33% more likely to be human-friendly, in which employees are 31% more productive. That’s because automation can relieve workers of the monotony of repetitive tasks and allow them to focus on more rewarding, engaging work. And higher employee engagement comes with meaningful benefits, including higher performance, retention, and yes, profitability
Examples of complementing employees with automation are everywhere, but may include:
Mobile robots handling point-to-point load movements, like moving components from storage to assembly lines
Extendable conveyor providing ergonomic assistance for loading and unloading on the dock. As employees unload, the conveyor moves with them, extending further into the trailer to reduce the walk time, lifting and twisting associated with unloading tasks.
Customize your Automated Systems
Keeping extra inventory to reduce the risk of a shortage-related disruption pressures operations to find efficiency gains anywhere they can. And while automation can help businesses increase efficiencies, getting a system that can handle unique product sizes and shapes can be a challenge. Automotive production depends on everything from tiny sensors to large, pre-assembled components like transmissions, wheels, or axles. Specialty and custom automation components, such as conveyors, stackers, lifts, and more can be built according to the requirements of virtually any item type.
Rate is another important consideration, as aligning system performance with real-world needs enables you to strike the balance of the performance you need without overspending on margin-busting excess.
It all starts with a conversation. Talk to our experts who specialize in serving the unique needs of the automotive industry, and we’ll help you make sure your material handling systems hold up their end of the supply chain resiliency bargain.
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