The Auto-Supply Chain in the United States


TheAuto-Supply Chain in the United States

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July24, 2014

TheAuto-Supply Chain in the United States

Backin the day, in the 1920s when the United States automobileconsumption was highly personal passenger vehicles, the industrynever required the plethora of choices: producers and manufacturerscould produce whatever suited the buyer. However, times have changed,and the U.S Auto industry is now becoming more consumer driven. Thelatter is affirmed by the fact that the U.S Auto-consumption alreadyswitched into the extended use of passenger vehicles. The overalloutcome was disintegration of the tight consolidation in the industry(the Automotive Industry Action Group – AIAG), tight competition inout-source and offshore productions, and the re-establishment of amore buyer-driven auto-supply chain. In regard to this, the belowessay have laid its basic goal to identify the various links presentin the today’s world automotive supply chain, the purpose they holdin the chain, and their overall value in the industry(Mohile,2013).

Thespearheading link is the design level. It is a high value added linkwhich is very essential in ensuring that the industry suit thebuyer-driven criteria. The prime purpose of this link is researchingthe most recent consumer needs and wants. Research outcomes areengineered into viable designs for the immediate production.Consequently, it is a major relieve to the link since the presenthigh technologies and use of computers in the designing process nowenables the designers to convert sketches to ‘car concepts’ andprototypes in less than a year a very short period as compared tothe 5-years term required in the past. The designing link plays handin hand with the raw materials link –a low value added link, but ofdire importance to the industry. All raw materials, including glass,natural rubber, aluminum, steel, or even plastic, are monitored atthis level testing viability and all evolutionary means that canhelp improve overall efficiency of the products.

Theparts-level is another very important link in the chain. The link isessential in supplying car parts such as windshields, air bags, andtires. However, even though it ranks as a medium value added link, ithas faced a lot of revolutions, especially in the U.S Auto industry.In the United States, the link is fragmented into four primecategories which include the original equipment manufacturers(General Electric and Delphi), replacement parts manufacturers(Federal-Mogul, Rubber, and Cooper Tire), replacement partsdistributors, and the rubber fabricators (Cooper and Goodyear)(Mohile,2013).

Theassembly link follows. It is a medium value added link whose primepurpose is to effect parts combination while gauging whichcombination best fit minimal production. The assembly link is veryimportant given the recent global trends in efficiency andcost-reduction principles. The outcomes of the assembly link directlyaffects the marking level of the industry. It is the consequent, highvalue added link that is integral in the value chain of the industry.Individual dealers and automakers work together in the creation ofproper markets both in the local and regional as well as in thenational levels.

Finally,is the distribution and sales level? It is a high value added linkwhose act now lifts out from the United States to the rest of theworld. In essence, production completes at the assembly link, and nowit is the prime goal of both the marketing and the distribution andsales links to complete the supply chain. After viable markets areidentified, vehicles are shipped and distributed to dealers allaround the globe, who, on the other hand, employ all necessary meansto ensure sales. For instance, they can offer incentives to consumerssuch that to increase the general sales (Standard &amp Poor 2014).


Mohile,s. (2013). Weakest link in automobile supply chain hit the hardest.Budget2014,33(2).

Standard&amp Poor, (2014). TheAutomobile Industry &gt&gt Global Value Chain.[Web] Retrieved July 24, 2014 from&lt