Every sector of the automobile industry is entirely reliant on a smooth, functional supply chain. Even the slightest delay in packaging, processing, or shipping can have a major knock-on effect in vehicle body shops and car dealerships.
In previous years, supply chain managers had to rely on a combination of data trends and experience to make judgment calls. Now, artificial intelligence (AI) can give supply chain managers more accurate forecasts and help them mitigate major issues in the automobile industry.
COVID-19 and the Automobile Industry
Most of us are trying to put COVID-19 in the rearview mirror. However, many industries are yet to fully recover from pandemic-era supply bottlenecks that continue to impact consumers and businesses.
During the pandemic, driver shortages hit an all-time high. According to data collected by the American Trucking Association, the driver shortage totaled 80,000. Predictions suggest that the number of drivers needed will rise to 160,000 by 2030.
The mass driver shortage has placed major strains on supply chains. While drivers must comply with hours of service regulations, some truckers still drive longer hours to meet company demand. Thus, supply chain issues are negatively impacting truck drivers — leading to more crashes, higher turnover, and longer delays in shipments.
The automobile industry is particularly vulnerable to driver shortages and long waits for delivery as many sectors require fast, reliable shipping to meet the needs of their consumers. Without reliable order fulfillment, customers’ cars will idle in garages and businesses will lose income as disgruntled consumers will look elsewhere.
AI can help auto supply chains by making operational changes that can mitigate driver shortages. The current automotive industry relies on a “just in time” (JIT) manufacturing model that buckled under the pandemic-era supply chain issues. Businesses today may reassess their operations to store more stock onsite to create a more resilient and reliable supply chain for their business and the businesses they supply.
Other Supply Chain Issues
As the world rebounds from COVID-19, other global events have caused shock waves to supply chains around the world. In response, data analyst firm, Cox Automotive, reduced its yearly forecast of car sales from 15.3 million to 14.4 million. Senior Economist at Cox, Charlie Chesbrough, explained: “The lack of supply is still the greatest headwind facing the auto industry today.”
Getting to the bottom of the supply chain issues that impact the automobile industry can be tricky. Fortunately, J.P. Morgan’s recent research into global supply chain issues may point us in the right direction. Research suggests that the Russia-Ukraine conflict has caused a bottleneck of metals — namely nickel, palladium, platinum, rhodium, aluminum, and copper. This has a knock-on effect on the automobile industry, which is heavily reliant upon these materials. However, J.P. Morgan does predict a strong recovery in global car sales as China eases COVID-19 restrictions and makes for a more friendly automotive economic climate.
AI can help supply chain managers forecast future issues caused by a geopolitical conflict with greater accuracy. AI programs that use machine learning software offer unparalleled data analysis and can make predictions at a fraction of the speed that humans can. This means that the AI-integrated automotive supply chains will become streamlined as businesses across the industry will be notified of issues and potential solutions before they have a ripple effect on consumers.
Supply Chain Vulnerabilities
AI and open-source software will support the cars of the future. These are exciting developments, as major players like BMW, GM, Ford, and Fiat will soon release cloud-like services that connect everything from your engine and transmission to your cruise control and anti-lock brakes via a sophisticated network.
Open-source automobiles will hasten the uptake of electric vehicles and give us all smart cars. However, these developments may leave some drivers and manufacturers vulnerable to malware and hackers.
It’s unlikely that any developer would intentionally plant viruses in open-source software. However, that won’t stop malicious players from attempting to hack and exploit it. While developers should be able to quickly spot breaches and anomalies, any exploitation of smart automobiles will send shockwaves through consumer behavior and potentially tank sales.
Fortunately, AI is already being used to predict and prevent supply chain attacks from hackers and other malicious actors. Hackers today use sophisticated measures to bypass preventative controls, and the attack area available to hackers has increased. AI detection is necessary to crawl through massive amounts of data and spot breaches that human eyes alone would be hard-pressed to notice.
Conclusion
The automobile industry has been hit hard by supply chain issues. Sanctions placed on metals and pandemic-era driver shortages have caused bottlenecks to form and driven up the price of basic goods in the automotive sector. The automotive industry may also be at risk of sophisticated hackers as more open-source software is manufactured into vehicles.
AI can mitigate supply chain issues by helping businesses make quicker, better-informed decisions based on data and forecasts. AI can also predict and prevent attacks before they occur, meaning that consumers feel safe in cars that utilize cloud-based software.
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