Electric Car Manufacturing and Supply Chain Management: Implications and Strategies

How electric car manufacturing transforms automotive supply chains Florian Klug Department of Business Administration, Munich University of Applied Sciences, Germany?

Supply chain management can be seen as capability matching the value chain resources and capabilities to the requirements of the market place. The increasingly important role of electric cars needs to develop new supply chain concepts in automotive industry. This not only involves inbound and outbound processes with external suppliers and dealers but also inhouse operations. The purpose of this paper is two fold. Firstly, to verify existing research about the impact of e-car manufacturing on automotive supply chains. Secondly, to investigate concrete supply chain inhouse implications based on different e-car operations models.

Electric car manufacturing, supply chain management, electro-mobility.

Today, the auto industry stands at a cross-roads: the increasingly stringent government regulations, a continued reliance on expensive and insecure fossil fuels, and growing concern over global warming, are creating much uncertainty (Gao et al., 2008). Battery powered vehicles are an upcoming contender to the traditional combustion engine dominated automotive industry. Therefore, the world’s automakers are stepping up investment in the development of alternative powertrain technologies. In spite of its current uncertainties and its disadvantages, the completely new technology used by electric vehicles, will dramatically change existing supply chains. The future shift in the automotive value chain of e-cars, especially the question of battery, electric motor and transmission production, will transform the nature and level of logistics coordination across dispersed plants. E-car production has an effect not only on the flow of materials from the suppliers to the vehicle plant and the finished car distribution to the markets, but also inhouse material flows have to be taken into account. Therefore, car industry has to rethink existing inbound, inhouse and outbound operations.

The approach advocated in this paper should help contribute to the great demands on the interplay of manufacturing and logistics operations that are so important for the total effectiveness of automotive supply chains. Overall literature review shows that there is a lack of describing supply chain implications of e-car manufacturing. This lack makes a strong case for further investigation. Therefore this paper will help in evaluating how car manufacturing transforms actual and future supply chain forms in automotive industry.

We adopt an exploratory research design, comprising of a multi-method approach, to understand supply chain implications of e-car manufacturing. This includes collecting data and analysing the data via explanatory case studies. Such an exploratory research design isp articularly suited for understanding phenomena in their specific context, and to understand “how” and “why” various supply chain forms differ from each other (Yin, 2009). The data and insight for this multiple case approach comes from a literature review of research and practitioner papers. In addition, studies to survey concrete e-car manufacturing models have been used.

In total we studied 15 e-car manufacturing cases. The selection of case study targets was motivated by the need to cover the whole scope of manufacturing types (see Figure 1). Furthermore, the chosen cases were determined by availability of information and the logistical focus of our research. This case-based research best enables us to investigate the supply chain aspects within a real world industrial situation (Yin, 2009).