Gaining a Supply Chain Edge

German Auto Industry is Ahead of the Game with Comeback Plan

Considering my trip to Germany, my thoughts have been even more geared towards the state of the global economy. I have also been thinking about the latest topics for discussion at my meetings there, particularly with the German Association of the Automotive Industry (VDA)

I'll be visiting the Tompkins Associates' German office on the heels of some fairly positive news the country's GDP grew by 0.3% during the second quarter of this year, following a disappointing contraction of 3.5% during the first quarter.

So things are definitely on the mend in Germany even though full economic recovery will take awhile, just as it will with the rest of the world.

And we all know it's been a very trying year for the auto industry no matter what country you're in. Global demand for automobiles decreased, hence auto manufacturing went down the tubes.

Despite the downturn, Germany continues research and development efforts and believes that this is their key to coming out of the recession stronger.

As a testament to this, the German auto industry has not made cuts in R&D because they know that industry pressure continues to rise and they want to remain competitive. They have a Great Comeback strategy in place, and that's exactly what it takes to come back strong from the recession.

IT in the supply chain will continue to play a huge role in the auto industry. The downturn has no doubt strained supplier relationship management for manufacturers.

Some in the German auto industry are saying, "There are signs that a technological turning point is occurring concurrently to the worst recession since the start of car making."

Long-term success will be based on new technologies and suppliers' involvement in promoting technical innovations. Suppliers are going to have to up the ante to stay in the game, mainly their value adds.

I look forward to discussions with the VDA and to learning more about their Comeback plans. I'd really like to hear your thoughts on the global economy, especially on the auto industry's future.

Tompkins Associates

TAGS: Supply Chain
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