Communal platform to map automotive supply chain
Michigan-based Automotive Industry Action Group (AIAG) has secured agreement from multiple automakers to utilize a communal platform to map the automotive supply chain.
With support from General Motors, Chrysler Group and Toyota, AIAG is pioneering the first web-based industry database for identifying the physical movement of finished goods, parts and materials through the supply chain. The first generation of the AIAG platform, named “Supply Safe–Supplier Security Assessment,” will map shipments via the Customs-Trade Partnership Against Terrorism (C-TPAT) certification program. Each participating OEM asks their Tier 1 suppliers to create a profile in Supply Safe and indicate their C-TPAT certification status. As part of its profile, each supplier will enter relevant C-TPAT data, including geolocation of international sites that produce automotive parts and materials, entry points of shipments into the U.S. and final destinations of those shipments. Tier 1 suppliers are being asked to solicit data from their suppliers and cascade the data input request down through the supply chain. Each supplier will maintain security of its data profile, controlling which companies have the ability to view it.
Automotive Industries (AI) asked J. Scot Sharland executive director of the AIAG how the organization had persuaded automakers to agree to using a common platform to map the automotive supply chain.
Sharland: AIAG is all about collaboration. We independently engage senior level stakeholders (OEM, Tier 1, Sub Tier) and ask them to reaffirm and prioritize pain-points and new industry threats. Their inputs are provided confidentially and then reviewed without attribution during face-to-face peer group meetings. We then evaluate the aggregate input from all of the peer groups. Where we find strategic alignment (OEM, Tier 1, Sub Tier) for common pain points and threats, we launch a new AIAG project and circle back to secure industry commitment to support it.
AI: What technical details needed to be dealt with before the web-based system went up?
Sharland: There were three major challenges: 1. It was imperative that the supplier lists provided by the OEMs or Tier 1s remained confidential and that the suppliers had complete “command and control” of their profiles/inputs. 2. The development/deployment of a common risk assessment for the industry. 3. A robust system architecture that would allow us to quickly and cost-effectively expand functionality to integrate Canadian, Mexican and European reporting requirements and efficiently manage duplicate supplier site entries.
AI: Give us an idea of the work involved in getting not only manufacturers on board but also coordinating various government agencies.
Sharland: From an industry perspective, if the great recession, Fukishima disaster, Icelandic volcanic eruptions, flooding in Thailand, the EVONIK plant explosion etc. has taught us anything, it is how interdependent and complex our automotive supply chain truly is and how quickly these disruptions can impact our bottom line. The most time and cost efficient way to manage this type of risk is to work collaboratively. From a governmental perspective, all governments want the same things – stronger exports and greater border security.
AI: Initially, the ‘Supply Safe-Supplier Security Assessment’ platform will map shipments into the US. What will be some of the future services the system will offer?
Sharland: In terms of geographic scope, once we’ve validated our performance with shipments into the US we’ll look to integrate the border security requirements for Canada and Mexico. The EU would be next on the list, followed by Asia. In terms of content, we’ll look to expand the confidential supplier profile by including credentialing/certifications in quality, sustainability, environmental compliance, working conditions etc.