As a global industry, the automotive sector is bigger than the annual GDP of most countries. At $2.7trn, the giants of the industry have built entire towns to serve their operations. Toyota has a namesake city in recognition of its importance to the area. Wolfsburg in Germany is geared towards a German titan, Volkswagen.
And, of course, Detroit is the original “Motor City.”
The sheer size of the automotive industry and its support of entire cities is a testament to the broader ecosystem it drives. As the decline of Detroit demonstrates, if a car manufacturer starts to falter, its effects are felt far and wide. Recent headlines about the microchip supply issues also show the reach of the automotive sector and its pivotal role in the global economy.
Another feature of the automotive industry is the vast supply chain it supports. For any major car manufacturer, hundreds, if not thousands of other stakeholders play a role in supplying parts. And even before the microchip shortage, these supply chains were facing significant challenges.
The Automotive Supply Chain
The automotive supply chain is one of the most complex, dynamic, and intensive ever seen. A single car needs thousands of parts with varying degrees of sophistication - and these parts can come from all over the globe. Thailand, for example, has a vast automotive parts industry that employs over 500,000 people and drives 10% of the country’s GDP.
Thailand is a good illustration of the reach of the automotive supply chain. As a country, it is not famous for manufacturing vehicles and does not host any major carmaker, yet it plays an essential role in driving the industry forward.
By the time the parts come together in an assembly line in the US or Europe, a huge logistical operation has already taken place to facilitate the final assembly of the car, van, or truck. For each vehicle, partners in dozens of countries worldwide have to coordinate and ensure each component fits with each other and is delivered on time.
For carmakers, this is a constant challenge. As we’ve seen with the pandemic, the Evergreen being stuck on the Suez Canal, and the recent shortage of microchips, these obstacles to the assembly and delivery of vehicles come thick and fast.
It’s not surprising there is a lot of focus on the automotive supply chain, and carmakers invest heavily to make it as smooth and as cost-efficient as possible. When it comes to working with partners and other stakeholders, integration is vital.
Integration is Critical
To make the whole automotive supply chain tick, integration is essential for both external and internal reasons.
Externally, it is critical for partners to have real-time visibility on manufacturing and delivery schedules to control their production timelines. For instance, if you are a sat nav manufacturer, it’s essential to know when other parts were coming or if you needed to be aware of any software updates. Having that real-time visibility will help your team plan their operations accordingly.
Internally, as part of an assembly production line, you need to ensure there are no bottlenecks at any stage. Integrating all your internal systems will enable you to track productivity, delivery times, and other KPIs. Having that insight in real-time will help your business fulfill its crucial role in one of the most complex supply chains the world has ever seen.
Even after the final product is complete and rolls off the assembly line, integrated platforms can help carmakers and other automotive giants understand customer behavior. For example, monitoring the demand for electric vehicles (EVs) and getting a picture of the infrastructure to support EVs - such as charging points and other accessories.
That information will come through multiple channels, and it is essential to feed this information through to one central hub, where it can be digested and organized. The findings can then be fed back to the supply chain, and partners will be able to adjust to meet any change in demand.
APIs Supporting the Automotive Industry
We’ve touched on APIs many times on this blog, but to sum up briefly:
“API stands for Application Programming Interface. At Universal Adapter, we define API as the bridge connecting and integrating all of the data, applications, and devices used by a company’s employees, partners, and customers.”
To better understand how API integration works, check out our previous post on What is API Integration: A Straight-Talking Guide.
There are many aspects where APIs can be used to support the automotive industry, from the supply chain to improving the customer experience. The purpose of APIs is to serve as an engine room for data to be filtered and fine-tuned to deliver the smoothest possible experience.
The key quality of APIs is the ability to take large volumes of data in any format, filter it, and deliver the relevant information in a correct format to the intended system.
With so many partners and stakeholders involved in the process, there are many uses for APIs within the automotive industry. Here’s a selection of them:
- Supply chain logistics: The nature of automotive supply chains is global, which inherently means complex. It is critical for partners to keep track of progress at each end, particularly since so many manufacturers now operate with “just-in-time” models. APIs can be used to filter out the data and deliver the information each partner needs to complete their role in the chain,
- Internal assembly: Whether you are a carmaker or supplying parts, keeping on top of the assembly line is essential. Allowing your colleagues and employees access to internal systems is a vital part of that process. APIs play a pivotal role in ensuring each team can request and receive the information they need.
- Car software: For decades now, cars have become increasingly like moving computers, with all sorts of gadgets to enhance the driving experience. ABS and power steering are early examples. The implementation of GPS and Satnav is more recent - and with EVs coming in, technological development is only going to accelerate. In order to give the driver the high-quality experience they now expect, APIs will be crucial in ensuring the usability of tech.
- Customer analytics: As we’ve touched on earlier, analyzing buyer behavior and how they use their vehicles can be used to further fuel growth for the automotive industry. The one challenge of pursuing this data is the sheer volume such analysis can throw out. APIs can help you filter through the clutter and get you the information you need to understand what your customers are looking for.
Universal Adapter: Here for the Automotive Industry
With so many factors driving the automotive industry, it’s no surprise that the last two years have been challenging. However, with the emergence of EVs (European EV sales went up by 43% in 2020) and other technologies, the future is bright for the multi-trillion dollar sector.
We at Universal Adapter are ready to support you with our advanced API management software, together with EDI and supply chain solutions with our partners over at DiCentral.
