AUTOMOTIVE INDUSTRY

Logistics and Global Supply Chain Management

Table of Contents

Logistics and Global Supply Chain Managementi

Logistics and Global Supply Chain Management3

Introduction3

Discussion3

Cultural barriers3

Cultural barriers to supply chain Information flow3

Psychology of consumer: brand image4

Standardization4

Gender of the customer5

Communicating across the cultural divide5

Local manufacturers-competitive structure5

The inaccuracy of sales forecasts5

The delay in order6

Management of the logistics cost6

Case study: Toyota: lean manufacturing6

Conclusion7

References8

Logistics and Global Supply Chain Management

Introduction

The automotive industry is regarded as one of the largest industries of the world with the largest single manufacturing activity. The amount of steel that is utilized in the production of the automotives is almost about 15 percent of the steel produced in the worlds and uses almost 25 percent of the world's glass. The growth rate of the automotive industry was found to be almost 5.9% from 1951 to 1972. But due to the oil shock that appeared in the consecutive year of 1973, there was almost a decline of 1% that occurred every year. There was another reason for the decline in the market and the reason was saturation of the market in developed-countries. The developed countries still have a huge market, that is, utilize 70% of the to0tla cars and the truck but the potential level for the automotive in the developing countries still cannot be ignored as this is accompanied by the lower income levels. The production of the cars seems to be expanding with changing dynamics of the market. This also resulted in the car surpluses and low utilization of production capacity. This consequently resulted in destroying the profits and financial performance of the automotive industry and automotive manufacturing companies.

Discussion

Therefore, there is a need to a balance between the supply and the demand in the market. So the manufacturing of the automotives should keep a watch for the whole chain, that is, from the supplier of the raw material to the individual who is the customer or the buyer in the market. So, the chains that govern the automotive supply is still dependant on the forecast and, in part, on the capable and responsive supply chain with a greater strategic emphasis, and later, on the logistics operations.

Cultural barriers

There are many barriers that are faced by the global suppliers in the global market and this can affect their market growth in those regions as well. This is well known to everyone that every country has some particular cultural norms that can affect on the market of the product. Similarly the market of the automotive industry also gets affected by many constraint that can deviate automotive industry as well and this particularly affect the global players in the market. There are many aspects and the challenges that are faced by the players of the culturally diverse market player. They may include factors like developing trust, openness and co-operation with each other and to the supplier and the buyers in the market. There could be many social barriers that create hindrances for the manufacturers, suppliers, logistics etc.

Cultural barriers to supply chain Information flow

It has been evaluated in a study by Andraski (1994) that in real-world ...