Executive Summary
The automotive industry is undergoing massive transformation due to electrification, shifting consumer preferences, and supply chain disruptions caused by global crises. Original Equipment Manufacturers (OEMs) and Tier-1 suppliers face mounting pressure to streamline supply chains while enhancing resilience. This case study showcases how a global automotive manufacturer partnered with our consulting team to optimize its supply chain operations—resulting in significant cost reductions, improved resilience, and accelerated time-to-market.
Problem Statement
The client, a top-10 global automotive OEM, was experiencing escalating challenges:
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Severe semiconductor shortages impacting production lines.
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High logistics costs due to fragmented supplier base and reliance on expensive air freight.
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Inconsistent supplier performance visibility across multiple regions.
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Slow response times to disruptions, causing production downtime of 8–10 days per quarter.
With electric vehicle (EV) launches planned in Europe and Asia, the client needed to build a more agile and transparent supply chain to meet customer demand and regulatory deadlines.
Approach & Methodology
We designed a four-phase supply chain optimization strategy:
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Diagnostic Assessment
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Conducted a supply chain maturity audit across procurement, logistics, and demand planning.
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Identified 25+ bottlenecks, including over-reliance on single-source suppliers.
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Supplier Rationalization & Diversification
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Consolidated supplier base from 1,200 to 850 suppliers.
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Introduced dual sourcing strategies for critical components like semiconductors and batteries.
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Digital Supply Chain Visibility
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Deployed a cloud-based control tower integrating IoT and AI-driven predictive analytics.
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Enabled real-time monitoring of shipments, inventory, and supplier risk scores.
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Process Optimization & Automation
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Implemented demand forecasting algorithms with >90% accuracy.
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Reduced manual procurement processes by automating purchase order flows.
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Solution & Implementation
The project was executed in two waves over 24 months:
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Wave 1 (0–12 months): Implemented supplier diversification and renegotiated logistics contracts, resulting in immediate cost savings.
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Wave 2 (12–24 months): Deployed digital supply chain control tower, predictive analytics, and process automation tools.
Additionally, a resilience framework was established to proactively address risks, including geopolitical disruptions, raw material shortages, and regulatory changes.
Results & Impact
| Metric | Pre-Optimization | Post-Optimization (2 Years) | Impact |
|---|---|---|---|
| Average Logistics Cost | $1,200 per unit | $850 per unit | 29% reduction |
| Production Downtime | 8–10 days/quarter | <2 days/quarter | 75% improvement |
| Supplier Base | 1,200 | 850 | 29% reduction |
| Forecast Accuracy | 65% | 92% | +27 pts |
| EV Time-to-Market | 36 months | 24 months | 1 year faster |
Key wins:
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$320M in cumulative cost savings over 2 years.
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Enhanced resilience against semiconductor shortages.
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Accelerated EV product launch in Europe and Asia by 12 months.
Conclusion & Key Takeaways
This case highlights how supply chain optimization in the automotive industry requires both cost-efficiency and resilience. By combining supplier rationalization, digital visibility, and predictive analytics, the client achieved not only immediate financial benefits but also long-term agility. This transformation allowed the OEM to stay competitive in the fast-growing EV market while minimizing disruption risks.