The global automotive industry is widely known to practice just-in-time (JIT) production, a lean manufacturing process in which time, labor and materials are optimized by only sourcing parts as they are needed.
JIT manufacturing has traditionally helped the automotive industry keep production costs down, but officials at TrueCommerce said the process hasn’t been upgraded or improved in decades.
Pittsburgh-based TrueCommerce is a global provider of supply chain and trading partner connectivity, integration and omnichannel solutions.
“The challenge that we have in automotive today is the same process that the original equipment manufacturers (OEMs) are using now is the same process that they were using when I first got into automotive 32 years ago,” David Eyes, vice president and general manager of automotive solutions at TrueCommerce, told FreightWaves. “That whole just-in-time process has changed very little in 32 years.”
For the automotive industry, TrueCommerce offers a solution called TrueAuto, a cloud-based, multi-tier supply chain integration and optimization solution.
But TrueCommerce isn’t alone in providing visibility solutions in the automotive supply chain industry. Other major players in the sector include project44 and FourKites.
The global automotive logistics market reached $284 billion in 2023, according to a report by ResearchAndMarkets.com. The market is projected to reach $463 billion by 2032, creating the “demand for efficient logistics solutions to manage cross-border transportation and customs procedures.”
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Eyes said one of the reasons JIT hasn’t been upgraded in decades is because OEMs have been reliant for years on electronic data interchange (EDI) technology to help automate and connect all the parts of their supply chains, everything from suppliers, carriers to warehouses.
“The term EDI is a very old outdated term. It’s a very customer centric process and it’s what we refer to as the carrot on a stick. But the carrot never gets anywhere here, the carrot is always half gone, because EDI is very dictatorial, EDI is all about meeting customer requirements,” Eyes said. “What we’ve done is looked at what are the gaps in the process.”
With automotive parts sourced from all over the globe, automakers today are finding that their manufacturing operations are constantly in flux as they have to navigate constant disruptions to their supply chains.
“Since COVID, the automotive supply chain has been massively affected because of black swan events, like the war between Russia and Ukraine,” Eyes said. “Half of the raw material supplies have just disappeared. We have sanctions with China, which is causing immense problems. We have the war in Israel, which effectively shut down the Suez Canal. Then we have the Panama Canal, which is running out of water. Four or five weeks ago, you had the Baltimore bridge collapse, which believe it or not, came within hours of shutting down three or four major OEMs.”
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The automotive solutions expert said the one thing each of these black swan events had in common is that neither the supplier nor the OEM knew if their parts shipments were affected by the situation.
TrueAuto aims to help large OEMs, 3PLs, as well as Tier 1 and Tier 2 suppliers, digitize their supply chains while achieving end-to-end visibility, Eyes said.
“I compare TrueAuto to Uber Eats. If you think about what Uber Eats does, it’s a communications hub, it’s an integration hub,” Eyes said. “It connects me as the customer, it provides me with the menu of my options and along with 100 other restaurants. I select who I want to buy my product from through Uber Eats, who passes that order to the pizza shop. It now creates that communication flow where I can see the messages, the responses from the pizza company. Uber Eats is then reaching out to a transport provider that will eventually deliver the pizza to me.”
Eyes explained that what TrueAuto has done is similar to Uber Eats, which is to create a simplified process to connect the OEMs, suppliers and carriers together with little or no complex technology.
“What we are doing, we’re connecting all the data together and showing that data back to the end customer, whether it’s an OEM or a supplier,” he added. “We’re capturing all of that different information from the different systems and effectively answering the question of, ‘where’s my part?’”
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