The global supply chain is about to changeJune 26, 2022 • Source: link.autonews.com

The global supply chain is about to change

In most issues, we tell you what's going on with the industry's various suppliers of critical parts. This week, we've connected the dots to tell you what's going to be going on with them.

The Supply Chain of the Future is a multi-angled discussion that shows you how the cozy old arrangement of recent decades, of auto parts and materials moving among customers, is facing radical change.

The reasons are diverse. There's the industry's shift to electric vehicles. And there's the need for new technologies to go into them. There's a growing need for manufacturers to reduce their carbon footprint — especially in Europe. There's a new desire to get away from relying on long-distance shipping, to put parts-making as close as possible to vehicle assembly plants. And there's the burning need to have more insight into where every part is, large or small — although not everybody's comfortable with that insight.

There are also new automotive materials coming through the pipeline. ("Gallium," anyone?) And there are billions of dollars being invested to make it all happen.

So how does all this shuffling affect any given company? Take a look at our front page story about the Toyota-affiliated supplier Toyota Boshoku to see for yourself. Boshoku was already big — a key supplier to everything Toyota does around the world. But in the new world that's coming? Boshoku is scrambling to create new parts and solve new problems that haven't even arrived yet.

And all that at a time when supplier margins are not as rich as they used to be. Two years of disruption in the guise of COVID and the worldwide chip shortage have trounced supplier profitability. We discuss that predicament on Page 3 as we publish the 2022 Automotive News Top Suppliers ranking this week, the annual list that gathers data on the world's biggest parts companies, ranked by OE parts sales.

Consider it one look back to call it like it is, and one look forward to call it like it will be