1 November 2005
Researchers from Monash and Melbourne universities have identified several supply issues that could prevent Australia's automotive industry achieving world-class status, if left unchecked.
Professor Amrik Sohal (pictured) from Monash and Drs Prakash Singh and Alan Smith from the University of Melbourne have found many car companies are focusing on their supply chains for sources of competitive advantage. The academics' research has been published in the International Journal of Production Research.
Professor Sohal found manufacturers were asserting themselves over suppliers, in what some suppliers labeled as a 'stressed' and 'frustrated' relationship.
"Car manufacturers are devolving more of the manufacturing functions to suppliers and becoming more engaged in customer management and after-market sales activities," he said.
"Suppliers are continually being asked by manufacturers to take on greater responsibility for assembly of components to a stage where complete modules can be fitted into cars.
"This trend has enabled car manufacturers to become leaner in their operations, but the result for suppliers has been mixed, with some not willing to risk taking responsibility for assembling components."
Professor Sohal said manufacturers also expected suppliers to be located close to their plants.
"Again, manufacturers have reaped significant benefits as a result, such as reductions in lead-time and lower buffer stocks, but for most suppliers it has meant additional costs.
"Technological changes in the medium term are expected to be quite dramatic for the industry, which may render many suppliers technologically obsolete."
He said the industry was also vulnerable to skills shortages in computing, design, electronics and logistics.
"Supply chain management is a complex multi-dimensional and multi-disciplinary concept with many unresolved issues posing varying levels of risks to the individual players and the entire industry."
Professor Sohal said it was essential to the automotive industry and the general community for the issues to be addressed collaboratively by stakeholders. "Governments at all levels need to continue to play a role by setting relevant policies, providing assistance programs and by facilitating collaboration and cooperation across the industry," he said.
For further information contact Professor Sohal on +61 3 9903 2033 or Ms Natasha Whalley, Media Communications on +61 3 9905 9201 or 0437 458 457.
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