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Logistics Challenges in a Changing Auto Industry

Automotive Site Guide 2008
(page 2 of 2)
Winning in This Economy
Each of the OEMs are looking at the huge opportunities in Western Europe and Asia for not only part sourcing for U.S. production, but also for new consumers of their vehicles. Financial statements show that the Big Three domestic companies are profitable overseas and losing money in the United States. The desire for smaller and fuel-efficient cars has long been the rule in these overseas marketplaces. Capitalizing on these designs and efficiencies will lead to reduced engineering costs. A "world car" - a concept from Ford in the `80s - will seemingly rise again. Working to a global demand for products and adapting to this global consumer is critical to future success for OEMs and Tier 1 suppliers.

The $2,500 car is not a pipe dream. While this creation could never pass stringent U.S. safety and emissions standards, the paradigm shift will occur as we adapt to a world market and compete on a total cost basis with supply chain costs plus cost of wages and materials from various world markets. Know your costs and price your products and equipment to beat the total cost of the alternative global solution. Compete with knowledge of the costs of your global competitors. Are you studying the economics faced by your customer? Have you engaged them in the dialogue? What is the total cost calculation they are using? How can logistics be your differentiator?

Adapt to change. Accept change. Seek change. The future will be brightest for those OEMs, tiers, and suppliers to the industry that build flexibility into their business models.

Kerry Zielinski is vice president, business development for CEVA Logistics, a supply chain management company with facilities in more than 100 countries. Visit the company's website at

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