The CEE Automotive Supply Chain conference, the flagship event dedicated to the automotive industry in Central and Eastern Europe (CEE), was held in Olomouc, Czech Republic, on 24 and 25 October 2023.
“CEE Automotive Supply Chain 2023: Major Challenges and New Horizons for the European Automotive Industry”.
More than 330 key players took part, including Air Time Critical®, present with its local office for Slovakia and the Czech Republic. The event revealed the major trends and challenges that will shape the European automotive industry over the next 5 to 10 years.
Representatives of renowned companies who shared their visions included Toyota TMCZ, SKODA, Kia Slovakia, Hyundai Motor, Siemens, JTEKT, Vitesco Technologies, Yanfeng and EY Consulting. Among the major challenges that emerged were the rapid transition to electric mobility, fierce competition from China and the United States, and above all, the urgent need to increase supply chain resilience.
Friendshoring, a concept on the rise
One of the innovative concepts discussed in depth was ‘Friendshoring’, an intriguing alternative to traditional offshoring, where European automotive companies seek closer partnerships with their geographically close counterparts. This strategy aims to strengthen the resilience of the supply chain by reducing dependence on distant suppliers, while addressing environmental concerns by reducing the distances travelled for components. Countries such as Turkey, Tunisia, and Morocco, as well as Central Europe with the Czech Republic, Slovakia, Hungary and Poland, where ATC® is present, should benefit from this trend, which has already begun and will continue in the future.
China’s shadow over automotive electrification
The growing dominance of China proved to be an unavoidable issue, with a significant lead in the battery sector and a reduction in production costs, forcing the European automotive industry to face asymmetrical competition, as China does not have the same costs or the same standards to comply with. Geopolitical uncertainties were also highlighted, underlining the crucial importance of supply chain resilience.
Building resilience: agility, communication, and crisis teams
Among the lessons learned to strengthen the resilience of the industry, several aspects emerged clearly:
- The need to cultivate agility at all levels: within production, using simulation tools to anticipate variations in output and stock shortages (digital twin), but also from the product development and design phase, by considering contingency plans (Plan B and C) even before the launch of production.
- Agility must also extend to supply chain management, by encouraging the interconnection of several production sites. This approach makes it possible to share available stocks in the event of supply difficulties at one of the sites, as illustrated at the conference by the example of Siemens and its 40 interconnected plants.
- Finally, increased communication is essential: enhanced internal communication, with grids for describing, qualifying, and assessing crisis levels, must be put in place. A clear formal escalation process is essential, as is the creation of crisis teams at top management level. These crisis teams ensure an accelerated and effective decision-making process when necessary.
Air freight: an agile asset in the race for innovation
Air freight was also mentioned as one of the keys to increase agility.
As one car manufacturer from Slovakia said on stage: until now, air freight has been a supply-chain element, mainly used to make up for supplier delays.
Air freight is becoming a major asset for speeding up changes in the production tools
In this new era of intense competition air freight is becoming a major asset for speeding up changes in the production tools, development of prototypes, design of products and quick testing of pre-production runs.
Factory undergoing a modification of its industrial equipment does not produce and does not bring in money. It is therefore essential to shorten this non-productive period to what is strictly necessary. Air transport can meet this increased need for speed and flexibility during the modification phases of the industrial tool.
Air freight at the service of projects
This reflects the reality encountered by the Air Time Critical®. Indeed, over the past 2 years, we have seen a growing number of requests for R&D and project managers. ATC® provides them with rapid door-to-door solutions for sending prototypes, pre-series or even production equipment. The most used solutions is hand carry (On Board Courier) and priority air freight (Next Flight Out) in regular passenger flights. The air charter service can be useful for the transport of equipment, mould machines, etc. Do not forget that a technician can accompany the equipment during the flight in order to quickly install the machine in the factory at destination. This new style of transport requires greater support for customers who do not necessarily have prior logistics experience. They are therefore looking for turnkey solutions, export-import procedures included. Air Time Critical® makes it its duty to support them as best as possible.
CEE Automotive Supply Chain 2023
All in all, the CEE Automotive Supply Chain conference 2023 was a real eye-opener on the challenges and opportunities facing the European automotive industry. The current Friendshoring trend is set to have a major impact on the automotive sector in Central and Eastern Europe. The race for electrification and innovation is on, and the most agile players will be the ones to stand out. See you next year in Žilina, Slovakia!