If you follow the automotive industry, you have probably read this WSJ news article:
So….how can Detroit biggies chart a path out of this ? There is no doubt that EVs are the future but we also know that they are not there yet as far as mass adoption is concerned. Too expensive for masses and will remain so for years. However, Detroit’s gas powered vehicles still cater to a massive market, investing parallely in the future, which we all believe are EVs. Yes, they may not have been extremely agile in the transition but the challenge of companies that have existed for 100+ years are entirely different from companies like Tesla that started on a platform of innovation.
The transition to mass scale EV production, across multiple levels, will take years for Detroit biggies but the good news is that the market will be mature by then. In parallel, Detroit biggies need to charter a stepwise Ops & Supply Chain strategy for the present and the “new” future. It should be a multiphse approach like the one illustrated below. Not going to provide too many details since smart people at these organizations may have charted better path by now and are probably already working on that journey.
Short term: (1-2 years timeframe)
This short term will cater to help them reduce costs, while they focus on investing in innovation in EV space. Typical example is leveraging analytics to find efficiency opportunity in areas like Procurement, Inventory , transportation and warehousing, without making any significant structural changes
Mid term: (2-5 years timeframe):
The focus starts becoming more strategic for this time frame, focused on initiatives like Network design, Manufacturing reengineering, Product design modifications, Strategic sourcing, Logistics & Transportation network redesign
Long term: (5-10 years timeframe):
This is the key strategic lever- project focused on creating a redesigned enterprise for a new Industry, which (hopefully) will be driven by Industry X.0, geared towards an all EV market. Smart Factories, integrated with Smart warehouses, supported by connected fleets etc. Oh..and did I forget to say that work on all these three strategies need to start like NOW ?