Complex Auto Supply Chains Demand High-Quality Labeling

by Harald Desjarlais, on July 20, 2017

Auto manufacturing's geographic reach has never been greater.
Auto manufacturing's geographic reach has never been greater.

Auto manufacturers, empowered by the latest technology, are expanding their operations around the world in search of affordable and efficient ways to keep production clipping along. That means creating systems with enough speed and automation to minimize the long distances that can separate suppliers, manufacturers, resellers and more.

Supply chains reach new shores

As The New York Times recently highlighted, Western brands' auto manufacturing has made landfall in China, with brands such as Ford deciding to set up production hubs there. Considering that many of the suppliers of parts are already based in the country, this decision has financial appeal for automakers. Furthermore, strong tariffs on cars imported to China mean that there is a strong incentive for companies to manufacture there if they want to sell in China.

In an article, the Center for Automotive Research considered a few of the other factors affecting international vehicle manufacturing today. The North American Free Trade Agreement and its stipulations on percentage of components that must originate in North America will be in the spotlight this year.

Any change to the current number - 62.5 percent of components must come from the NAFTA countries for vehicles to qualify for free trade - could be an issue, as the parts market is only becoming more dispersed. As noted in the Times story about Chinese manufacturing, a significant amount of vehicle components are already produced in China, even when the cars are assembled in North America.

Components and factories are only increasing in geographic dispersion.Components and factories are only increasing in geographic dispersion.

Staying Efficient

As companies navigate challenging manufacturing situations and complex trade rules, prone to change under political pressure, they need ways to keep their supply chains efficient and compliant. This is where enterprise labeling proves its worth as a mission-critical component. Suppliers and manufacturers that standardize their efforts can increase their visibility and ensure uniformity and quality, even as they press on with increased globalization.

For more on Automotive Labeling check out our recent QA report on that topic.


Topics:AutomotiveSupply ChainManufacturing