Despite a global slowdown in economic and leisure activity over the past year and a half because of the COVID-19 pandemic, sales in retail and other industries have recovered quite well in recent months.
That is, all industries except for automotive.
Overall sales were up 40% year-over-year in April 2021, and the retail industry specifically experienced a 48% increase year-over-year.
However, when diving deeper into the data, it’s clear that the automotive industry played little in that increase.
Since the beginning of the pandemic, global restrictions have forced manufacturing plants to halt operations.
As a result, a shortage of auto parts and semiconductors has made it challenging for the automotive industry to keep up with production and supply.
The effects of the semiconductors shortage have been grave on the entire industry.
Assembly lines stopped, and many dealerships announced they wouldn’t meet their original expected revenue projections.
It doesn’t mean that car shoppers and dealerships are at a lost cause.
There are a few ways auto dealers can mitigate and tackle the challenges brought on by the shortage of semiconductors.
Increased Transparency of Supply and Demand Intelligence
Transparency is one of the key solutions to many supply and demand challenges.
Data, processes, and relationship transparency help make operations more efficient and effective.
It also ensures that auto dealers understand supply issues, changes in demand, and the different segments impacted by unexpected events like parts shortages.
With increased transparency and communication of data, auto dealers can better manage their supply chains, reduce errors, and create better relationships with suppliers and customers.
Improving Resilience and Demand Responsiveness
Resilience is another key solution that can solve many supply issues.
Auto dealers should have an actionable plan in place for responding to unexpected events that can cause sudden supply shortages or demand spikes.
For example, by allocating more resources to regional sourcing and sourcing from different suppliers, auto dealers are less impacted by supply-chain shocks.
Although the shortage of semiconductors is temporary, there will be other challenges that auto dealers have to weather when it comes to supply and demand.
SHEA Global is dedicated to helping our clients in the auto industry overcome the inefficiencies in their production processes and supply chains.
We provide strategies and solutions that can easily help you improve transparency and resiliency throughout your operations, so you can enjoy better operations, mitigate risks, and spend more time focusing on your customers.
Want to learn more about how we can help you? Contact us today!