In the automotive industry, supply chain is typically not viewed as a driver of profits — but that needs to shift.
Over the years, the supply chain has evolved from a mostly local or regional operation into a sprawling, diverse, global enterprise. And as the pandemic proved, it can make or break an organization.
In the premiere episode of Auto Supply Chain Prophets, co-host Jan Griffiths talks with Cathy Fisher, Founder and President of automotive management systems firm Quistem, and Terry Onica, Director, Automotive who directs vertical solution strategy for enterprise resource planner (ERP) and supply chain solution provider QAD, about the importance of changing this perspective.
Themes discussed in this episode:
Name: Cathy Fisher
Title: Founder and President, Quistem
About: Cathy’s firm helps its clients, particularly automotive clients, eliminate customer complaints and increase their profits. She has worked in the automotive supply chain since the 1980s when she started her career with General Motors.
Connect: LinkedIn
Name: Terry Onica
Title: Director, Automotive at QAD
About: For two decades, Terry has been the automotive vertical director of this provider of manufacturing Enterprise Resource Planning (ERP) software and supply chain solutions. Her career began in supply chain in the late 1980s when she led a team to implement Electronic Data Interchange (EDI) for all the Ford assembly and component plants.
Connect: LinkedIn
Name: Jan Griffiths
Title: President and Founder, Gravitas Detroit
About: A veteran executive in the automotive industry, Jan previously served as chief procurement officer for a $3 billion, tier-one global automotive supplier. As the president of Gravitas Detroit, Jan provides online courses, speeches, podcasts and workshops to break the mold of command and control leadership to help you unleash the potential of your team and allow authentic leadership to thrive!
Connect: LinkedIn
Timestamped inflection points from the show
[1:21] A supply chain shift: When Cathy Fisher, Founder and President of automotive management firm Quistem, began her career with General Motors in the 1980s, the supply chain was much more vertically integrated. Now it’s more global and diverse.
[2:42] Decades of shop floor experience: Terry Onica directs enterprise resource planner (ERP) and supply chain solution provider QAD’s automotive division. She began her career in supply chain in the 1990s, implementing all the electronic data interchange (EDI) for Ford.
[3:58] The good, the bad, and the ugly: Jan Griffiths points out that ERP providers have to observe and improve upon every aspect of an organization’s supply chain, and this kind of experience is invaluable to discussions like those that will take place on this podcast.
[5:46] Cash in the chain: Automotive manufacturers traditionally thought that the shop floor was the real source of money and value. Cathy and her colleagues have noticed that money is actually made in the supply chain, where sourcing, physical logistics, and materials management are key factors.
[7:26] Defining the supply chain: A range of definitions exist, butto Cathy and Terry, supply chain includes all the materials plus the purchasing at the corporate and plant levels.
[8:34] Two steps back: The pandemic created something of a return to the vertically integrated supply chain, which was more localized or regionalized. By 2020, It had evolved into a more sprawling landscape with multiple sites spread out all over the world.
[9:55] A wider view: Cathy and Terry are encouraging organizations in the automotive industry to focus on the supply chain strategically, as well as operationally.
[10:30] The green monster: One need only look at Amazon or similar organizations to see the profit potential of the supply chain. Cathy says that if the automotive industry doesn’t start to study these examples, “Amazon’s going to start selling our cars.”
[12:22] It’s time to evolve: The current “command and control” leadership model grew out of the Industrial Age. Jan believes the way for automotive companies to move ahead is to start viewing supply chain as “a strategic function that could have massive impact to the bottom line.”
[1:21] Cathy: “I started with General Motors back in the 1980s, and it was a very different supply chain back then, very much vertically integrated, and I've been able to observe the transformation and be a part of that transformation over the past several decades, where we've become a lot more global, a lot more diverse.”
[2:07] Jan: “Many people that profess to know about supply chain have never spent a day on the shop floor.”
[4:34] Terry: “Our philosophy is bringing those best practices of automotive and mapping them into the ERP solution, so when you implement, you don't need to worry about creating a new playbook. You go right from the playbook from the ERP provider that already has done that for you, and we see implementations going as quickly as three months or less.”
[5:52] Cathy: “We recognize that actually, money is made in the supply chain, because it's really about getting the right product at the right place in the right quantity at the right time, and that's all about the material movement. It's all about sourcing. It's all about the physical logistics and materials management functions, which so often automotive manufacturers today, either outsource or really don't have the depth of understanding of what are the key processes that are necessary to deliver on the promise of delivery to their customers.”
[10:30] Cathy: “If we look at organizations like Amazon, they've really established the importance of supply chain in the ability to make billions or trillions of dollars just off of supply chain. The automotive industry has to get on board with that same focus in order to be able to survive going forward, otherwise, Amazon's gonna start selling our cars.”
