Professor John Taylor on supply chain demands of electric cars

Green cars are becoming commonplace on city streets all around the world. An increasing number of consumers love them and just about every major auto company is betting that these new designs will win the hearts of eco-minded individuals. At the same time, creating a supply chain to support this new demand is creating a variety of new challenges. Innovation in the automotive sector is sending ripples through the supply chain. Now more than ever, electronic component makers, module makers, and parts suppliers are becoming a critical source to a supply chain that has long been focused more on mechanical products. “Automotive OEMs are used to being in a pretty dominant position with people who make water pumps, valves, and other parts for internal combustion cars,” John Taylor, chairman of the marketing and supply chain department in the Mike Ilitch School of Business at Wayne State University, told EBN in an interview. “The way to make a car green is through electronics, though, so these organizations are having to strengthen relationships with a log of electronics and electrical type suppliers with whom they have historically did not have as good of a relationship.” When dealing with large component companies, automotive makers may not enjoy the power they have often had. “Some of these companies are powerful in their own right, and it’s hard to for the car supplier to have a lot of leadership with those suppliers,” said Taylor. “It puts them in a much more difficult bargaining position.” 

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