In addition to difficulty obtaining materials, automotive suppliers faced significant operational and logistical hurdles. In keeping with the law of supply and demand, these shortages quickly turned into rapidly escalating costs for many suppliers, with hefty price increases that were not contemplated in suppliers’ quotations, and in many cases they were not expressly covered by their supply contracts. While the global shortage of semiconductors may be the most publicized of these issues, many suppliers also faced difficulty in obtaining other materials, including steel, resin, and foam. The lockdowns of 2020 quickly gave way to shortages of many raw materials and components, as supply could not keep up with surging demand. The State of the Automotive Supply Chain as We Enter 2022įor many automotive suppliers, 2021 was a year defined by shortages, increased costs and other unprecedented supply chain challenges. The suppliers that best adapt will be the companies that are positioned best to thrive going forward. While the changing landscape presents challenges, it also presents opportunities for growth. Among other strategies, suppliers should consider updating many of their traditional operational and contracting practices in order to enhance flexibility in a more unpredictable world. This article highlights several key areas of focus for suppliers looking ahead, including seeking greater flexibility and risk sharing in pricing, warehousing/inventory, and managing freight costs. Suppliers must be agile and adapt to these new and continuing challenges. Unfortunately, as with many aspects of pre-pandemic life, the relative stability in the global supply chain that the automotive industry enjoyed for many years is unlikely to be restored any time soon. IntroductionĪnn Marie Uetz | Miller | Ellis | 2022, automotive suppliers face many of the same issues that have bedeviled the industry throughout 2021, as well as a host of all-new challenges. Putting Brakes on Cybersecurity Threats: Practical Strategies to Mitigate Cybersecurity RiskĮxpect the Unexpected: Approaching Raw Material Shortages, Labor Issues, and Freight Increases and Delays in 2022 I.Driving Sustainability: Automakers Look Beyond Electric Vehicles.EV Outlook: Market, M&A, Supply Chain, and Regulatory Trends.Preparing for Automated Vehicle Regulations and Enforcement in the Face of Stalled Legislation in 2022.Possible Silver Lining: Targeted Acquisitions.OEMs Expanding Suppliers Responsibility for Ordinary Warranty Claims.Key Employment Issues Facing Employers in the Automotive Industry in 2022.Nearshoring Trends and Important Considerations When Looking to Mexico.2022 Antitrust Outlook - Significant Changes Under the Biden Administration.NHTSA and Motor Vehicle Safety - 2022 Developments.Essential Compliance Updates for Multinational Automotive Companies.Expect the Unexpected: Approaching Raw Material Shortages, Labor Issues, and Freight Increases and Delays in 2022.
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