Professional Documents
Culture Documents
SUPPLY CHAIN
ISSUES WITH THE
SHORTAGE OF
MICRO-CHIPS IN
Final Assessment
AUTOMOTIVE INDUSTRY
Stemming from the Covid 19 pandemic
Table of Contents
Introduction:...............................................................................................................................................2
Review of theories and frameworks:...........................................................................................................3
Methodology and methods:........................................................................................................................7
Analysis and findings:..................................................................................................................................9
Discussion and implications:......................................................................................................................11
Recommendations:....................................................................................................................................12
Conclusion:................................................................................................................................................12
References.................................................................................................................................................15
Introduction:
In one of the worst disruptions in recent years, the COVID-19 pandemic highlighted the susceptibility of
international industrial firms to their supply networks and walking sports. It has involved those
substantial companies that underestimate the importance of robust and sustainable operations. Major
disruptions have been caused by the pandemic, particularly within the trade association for vehicles.
The aim of the review is to determine how COVID-19 will affect the Turkish auto manufacturer supply
chain operations and to strengthen the framework for operational sports activities to remain in a VUCA
(volatility, uncertainty, complexity, and ambiguity) environment. The analysis shows how the case-
testing agency has been impacted by the COVID-19 epidemic and what difficulties the company has
encountered during the course of the pandemic. Data were collected through a diagnostic survey and
semi-structured absolute interviews, including both qualitative and quantitative analysis. The
implications proved that the pandemic produced significant disruptions as a result of a number of
factors, including a lack of raw materials or substitutes, transportation accessibility, labor accessibility,
calls for turnover, an increase in absenteeism, and new health and safety regulations. The results also
demonstrate the need to restructure supply chain management and resilience by offering recovery
plans (forecasting, provider selection, simulation, and monitoring) that take considerable steps in exact
stages into consideration. These procedures have also been promoted for a case study that serves as a
good resource for taking indoor, outdoor, and technology problems into account during the COVID-19
pandemic. Some of the aforementioned changes and focused recommendations for the automotive
industry corporation may be applicable to the dealership model for particular companies. The section's
recommendations for further research and management applications for application to success round
up this part.
The automotive business is a key business that, with its mass capital and the volume of jobs it creates,
occupies a decisive position in the development of countries. Despite the fact that there are other
nations besides China, the United States, Russia, S. Korea, Japan, India, Germany, Italy, Spain, and
France, because the critical international location of the automotive business internationally (along with
Bulgaria, Czech Republic, Poland), Turkey and numerous Middle Eastern locations throughout the world
stand out due to the growing values of the organization. Production of cars is made possible by national
and international firms in significant segments (passenger cars, light/heavy industrial vehicles, and
heavy cars) thanks to the export-oriented structure of the Turkish automotive enterprise, manufacturing
infrastructure with high quality requirements, the availability of licensed workers, and the blessing of
being able to supply every EU market as well as those in the Middle East and Africa in terms of logistics
[Ministry of Development, 2018]. The Marmara region is home to the majority of Turkey's automotive
industry, which consists of more than 1,500 sub-sector companies and 13 essential industrial
organizations (Kocaeli, Sakarya and Bursa). It is assumed that Eskisehir has reached positive maturity
with its main industrial enterprise (Ford Otosan) and alternative businesses, as the automobile industry,
which has a significant percentage within the socioeconomic development of the TR42 environment, is
supremacy under the control of the province of Bursa (essential employer organization with overseas
capital*) or partners and an advanced network of sub-organizations gathered with the assistance of the
primary business enterprise**. The outcomes of the collection of the control and cognitive agency of
the survey as well as statistical and express information received from secondary sources were used in
the evaluation that was specifically conducted for the local automobile company. Access and coverage
proposals are made in this context and discussed with decision-makers.(htt85)
Building chain resistance (SCres) to COVID-19 has already attracted a lot of interest from scientists
recently. Researchers and practitioners from the North have called for additional appropriate supply
chain control that can deal with the extreme disruptions caused by the raging pandemic (Jac), huge
global supply chains, in addition to those from manufacturing sectors (i.e. automotive, electronics,
pharmaceuticals, and so on. ) and carrier sectors (i.e. airlines, retail carriers, shipping, etc.) have been
greatly affected recently due to their heavy reliance on China as an international delivery chain. For
example, Wuhan, the epicenter of the COVID-19 epidemic, is the primary center for the production of
automotive components, which provides critical ingredients for international car manufacturers,
alongside Volkswagen, well-known automakers, Hyundai and Toyota.
The principle of dependence on resources is primarily based on the principle that a business together
with a business company, i.e. it must interact in transactions with various actors and companies in its
surroundings in order to collect assets. However, the fact that such transactions can be wonderful can
additionally create dependencies that are not. It allows us to better understand their competition,
realize how primarily they may be based on a chosen organization or useful resource, and see how
numerous their business agency practices are. We are able to observe this idea to create a suit in the
event of problems, as we are currently dealing with supply chain issues with a lack of microchips in the
vehicle organization.
Analytical frameworks:
In the overviews, the current situational analysis of the running of the automobile company inside the
area has been adjusted to complete the use of the following evaluation strategies primarily based on
the "Tools and Contingency Manual for Spatial Cost Chain Evaluation"* [KAGM, 2020] organized from
the overall directorate of development groups:
• Gap analysis
• SWOT analysis
• PESTLE analysis
The aggregate can be used and the state of things can be better analyzed like this:
During the COVID-19 outbreak, by far the biggest primary challenges faced by professionals in non-heat-
treated material purchasing techniques are delays in logistics structures, Particularly severe rises in raw
material unit costs and problems with customs clearance brought on by higher demand as a result of
production agency provider provider capacity cutbacks and/or shutdowns.
Approximately 66.7 percent of the participating organizations reported lower logistical costs as a result
of the COVID-19 outbreak, and within this group, 19 percent reported a surge in logistics costs of more
than 25 percent. While the groups' previous or projected aspirations are being investigated, the market
percentage in particular is expected to decline due to the global financial decline and raw material
supply issues to increase. Similarly, you are expected to use cash relief mechanisms and reduce fees if
you want to be aggressive on liquidity and sales/promotional channels.
While the specific random factors influencing sustainable growth and the degree of business opposition
are unclear, his miles predicted that COVID-19 risks will have a wholly disproportionate impact in the
near future, as shared in the parent 14. However, in particular, the appearance of the new era vehicle
and technology, which they bring to the gadget, could have a moderate impact on the agency.
While the factors influencing the aggressiveness of groups inside the company are unclear, his miles
have discovered that the fierce industry competition and the consequently narrow profit margins are
now taking center stage. His miles discovered that production methods based on internal slog work,
particularly important worker losses brought on by the pandemic and flaws in technology change, have
an undue impact on competitiveness.
It is unlikely that manufacturers will specifically be prone to boost performance in production systems,
despite the confusion surrounding the transformational practices of businesses in the face of factors
affecting their competitiveness. Although such programs are not applicable or applied, their potential
effects on aggressive platforms should be very minimal for the general public of groups because they are
known to be passive, particularly in the competition with energy control, environmental practices, and
social responsibility issues. While the methods to be used by businesses to maintain their sustainability
and competitiveness in the face of global trends and growing new technologies are unclear, investments
in virtual transformation along with enterprise 4.0, modernization of production systems including
robotics are emerging they get structures and massive information management. However, investment
strategies in opposition to large product companies with high added value and requiring sufficiently
large R&D sports are found to be quite low within the destiny techniques of organizations.PESTEL
matrix:
STRENGTHS WEAKNESSES
• rich logistics infrastructure facilities (Gemlike • SMEs no longer allocating funds to corporate
Ports, alterations which include R&D and Innovation
toll road Connection Axes etc.) • manufacturing of low price-brought and
• properly-rooted business infrastructure and volumetric
leading products (kg/$)
corporations in the area (sectoral knowledge and • SMEs now not supplying certified body of
experience workers and
+ extensive overseas change activities) certified employees’ who prefer big-scale
• finding worldwide automobile sub-industry businesses in the area
businesses • lack of partnership and co-commercial
and having a huge range of merchandise enterprise lifestyle in
• wide possibilities for university-industry SMEs
cooperation +
fifty-five automotive R&D facilities
• energetic performance of the car supplier
industry
cluster
• lively/incorporated running surroundings with
neighborhood
governments and umbrella organizations
(TAYSAD, and so forth.)
• Attracting certified workforce to the place
OPPORTUNITIES THREATS
• The method of the primary industry to direct • multiplied strength, taxes, and many others.
neighborhood supplier enter fees
agencies that provide low price-high first-rate • surprising trade price fluctuations
options in • policy instabilities (SCT revisions,
new initiatives containing high price-delivered environmental guidelines for carbon emission,
parts produced in ADR policies, EURO 6 engine use, diesel
some distance eastern nations. consumption, etc.)
• assisting the infrastructure with a purpose to • increasing labor expenses due to COVID-19
respond speedy • economic contraction and liquidity issues
and adaptively to the fast proto-typing desires of resulting from COVID-19
OEMs and business transformation strategies
• potential cooperation possibilities in the
Electronics,
automobile and Informatics sectors Turkey's
ability of
being a worldwide logistics middle and new
gamers getting into the
marketplace
• growing of localization efforts with elements
equivalent
Certification system, and many others. incentives
and supporting supply
industries
• manufacturing of TOGG in the location and the
investment and
cooperation network it'll create inside the future
Five Power Analysis for the Automotive Industry:
Along with the need to upgrade the supply chain network and production structures, the pre- and post-
COVID-19 era opens up new options for a more sustainable company transition. The effects of disruptive
events are immediately felt at the operations, including a shortage of raw materials, transit delays, a
lack of spare parts, a reduction in labor capacity, etc. These disruptions, which started in the
downstream supply chain, had a knock-on effect that reduced the enterprise's carrier level standard
global performance, revenue, and process productivity—even having an effect on the global delivery
chain. The research highlights rigorous decision-making frameworks for developing a resilient
manufacturing approach. Additionally, Ivanov (2020) developed a model for assessing the effects of a
virus on the industrial resilience and supply chain community. The COVID-19 situation clearly presents
an opportunity for the development of a flexible and resilient manufacturing approach to maintain the
financial, environmental, and social sustainability of the company. The financial sustainability of the
company is directly correlated with the social and environmental factors. The effects of economic
sustainability are provided through well-known social and environmental sustainability initiatives. These
procedures help the business to have better financial standing. As a result, the practices have been
combined to become eco-environmental and socio-economic practices. Concerning the disaster's
negative effects on company operations and business coverage, experts, governments, corporate
executives, and legislators are all involved. As a result, companies work to address the troubling
circumstances and issues associated to the three sustainability-related additives. Consequently, there
had been severe responsibilities in the course of transformation in corporations, which include worker
well-being, effective verbal exchange techniques in the healthcare industry, community safety, remote
working conditions, and skill development. To lessen the effects of COVID-19 and maintain social
sustainability, a variety of projects for social sustainability are being supported by agencies. Businesses
were forced to regulate modern production structures and research crucial working measures to
maintain social distance from the hobby due to excessive risks to the labor capacity in operations.
Finally, In order to stop the virus from spreading, businesses implemented social distance at their
websites and workplaces. The next significant duty requires more time from the agencies in order to
gather employee productivity expectations while adhering to the established COVID-19 rules inside the
manufacturing facility. The two most important pillars of sustainability are the financial and
environmental ones, which offer with constrained assets to reduce operational property and waste to
preserve the environment and lower the operation rate. Outstanding best practices for socioeconomic
sustainability and environmental sustainability that were drawn from the written word.
Conditions and options for Organizations should inspire some distance off strolling in the
remote work course of the crises to make sure the employees’ fitness and
safety. Moreover, the aid and situations for walking remotely
want to be furnished to employees for the ergonomic place of
business
enhancing the company's or Organizations need to rent and beautify the social sustainability
brand's reputation in society initiatives to improve the agency’s photograph and status in
society
Corporate social responsibility To use social and environmental chores for society, businesses
(CSR) programs need to have a fee range for their CSR initiatives.
training initiatives to increase Training initiatives or community service initiatives can inspire
environmental sustainability staff members and the general public to increase their awareness
awareness of environmental sustainability and their documentation of it. To
achieve higher environmental performance and control, staff
members should receive professional education on the
importance of environmental policies.
Create a robust legislative The strategic approach toward sustainability has gone above and
framework to address COVID- beyond what is required by way of regulation. In the COVID-19,
19 firms were given strict guidelines to follow in order to implement
environmentally friendly practices, such as relaxed and clean
operations.
Remanufacturing and the 3R Greater delivery resources are made possible by the availability of
strategy (Reuse-Reduce- recovered materials and items for reuse and remanufacture,
Recycle) which also helps to diversify the supply chain. Additionally,
organizations need to implement a 3R strategy for products,
materials, and sources within and near supply chains. Reduce the
waste of helpful aid; promote sufficiency; and promote the reuse
and recycling of products and additives.
expanding the use of internet IoT and automation development are likely to be given priority in
of things (IoT) in business order to prevent the spread of upcoming pandemics and enhance
operations supply chain effectiveness. Due to the fact that using robots in
manufacturing makes the supply chain independent, safety is
guaranteed, and productivity is increased at some point in the
COVID-19.
Additive manufacturing Additive production or 3-d printing practices are rate green and
practices boom manufacturing flexibility to useful resource the sudden
adjustments in supply and get in touch with for all through the
COVID-19 pandemic.
With a strong historical foundation, the authors' motivation was to illustrate how the COVID-19
epidemic affected supply chain operations within the automotive industry. Using carried out diagnostic
survey investigations, it is possible to evaluate the stage at which impacted production and performance
have developed. The authors also expect certain improvements through the use of planning techniques
to create operational sporting events throughout the entire delivery chain that are more resilient to
unanticipated disruptions and dangers. The test will help include this incentive into a case study
evaluation since it should increase understanding of the pandemic's effects on agency operations and its
short- to long-term implications on the procurement and delivery of goods and services.
Case study:
To examine the effect of COVID-19 on operational activities in the automotive industry and to ascertain
business performance, a case study methodology was used. In this situation, an automobile company
has made the decision to carefully obtain reliable and accurate information. The analysis of literature
reviews on the impact of the COVID-19 pandemic disruptions on production companies served as the
foundation for the research's initial research questions and core hypotheses. Additionally, the use of a
case study research methodology helped to support the observation [37,38]. As a result, a company—
one of the major automakers worldwide, similar to Turkey with a local production—grows to be chosen
to be investigated using a case study as an example. As a result, one of the essential factors or
challenging circumstances was the ability to include employees and executives from this employer in the
study. Additionally, the authors believed they could show how the pandemic affected a much wider
mindset within unique aspects of supply chain operations.
Methodology Applied:
phase 1: Unstructured and semi-dependent interviews are the two primary codecs used in qualitative
studies. An unstructured arrangement has the advantage of allowing for truly complex and liberal
solutions because it often only focuses on one fundamental primary question. However, understanding
the results of the interview may be challenging because it is difficult to explain the relationship between
the respondent's response and the research question or conjecture, as well as the connection to the
literature. As a result, it changed into specific because it was the nonpreferred option in this
examination. The semi-dependent interview method was chosen because it aimed for a particular
degree of dynamic conversations between researchers and respondents while yet being grounded on an
interview guide. Flexibility became more popular so interviewers may express their perspectives on a
variety of themes depending entirely on what they believed to be relevant. Most of the interview
questions and the guidance that followed were open-ended, reflecting the elements that were included
in the study's motivation and questions. The interviewees were chosen based on their experience with
art and position within the company. The jobs of production manager, supply chain manager,
procurement/buying manager, and directors were chosen as some of the areas of interest since they
would make good interview subjects for this study. The interview candidates were deemed qualified if
they had at least five years of work experience, had successfully contained the COVID-19 outbreak, and
had knowledge of the organization's strategic decisions about threat mitigation strategies for
operational and organizational sports. As a result, interviews with four managers have been conducted.
Prior to the actual interviews, each interviewee's eligibility must be validated in order to confirm the
suitability of the pattern. Due to their comprehension of a growth of business operations, interviewees
who had experienced these developments were deemed to be the best candidates to respond to the
study's question. They can also provide check-related in-intensity statistics. The interview flowchart and
question suggestions are included in Appendix A.
Phase 2: System of survey questions and research hypotheses for the company under evaluation. The
questionnaire has been set out in a way that considers how the COVID-19 would affect operational
sports. In addition, survey questions for employees and managers had been created. In the studies, the
criteria for choosing the best survey participants (pattern) for data collection are focused on the
standardized nonprobability sampling based entirely on the particular shape of the research
examination. The main technique adopted during the records collection strategy changed into practical
sampling. This is backed by the fact that the survey respondents (workers) are employed by case test
businesses during COVID-19 and have firsthand knowledge pertaining to initiatives in operational sports.
In the beginning, the study's hypotheses had been framed as null forms due to the vagueness of the
questions asked during the semi-established interview.
Phase 3: examination of methodological theories (descriptive analysis) at the outset of a survey The case
study company was researched by the writers to learn new elements in the concept and compare the
steps the chosen enterprise has made and is taking to keep its operational sports activities at a few
degrees within the epidemic.
Phase 4: analysis and discussion of implications. In this section of the study, the case study commercial
enterprise levels received a conceptual framework, tips to boost performance in operational activities,
and potential business firm mitigation plans for the risks of potential capacity disruptions. The
information analysis of the semi-dependent interview used the narrative evaluation. The interviewee's
response's key components have been emphasized. The validity and long-term viability of the suggested
framework have been highlighted at some indeterminate point in the future of the online interviews.
Recommendations:
In order to identify the issues and take appropriate action as soon as possible in the wake of the COVID-
19 tragedy, it is typically advised to look into and monitor carriers and consumers. It may be important
to examine the company's products and clients to determine which ones survived the COVID-19
pandemic with no major issues and which ones experienced major issues that had an impact on the
business's operations after the pandemic or when the case has a follow employer has fully recovered
from the disruptions. Based on this analysis, strategic decisions may be made regarding whether or not
to continue working with reliable vendors and clients or look for more dependable ones. The excellent
exercise provided three tiers of advice on how to minimize the impact of the COVID-19 pandemic on
operational sports activities (e.g., experience, adapt and rework). The super practices are a
comprehensive comparison of countermeasure techniques that can be used in business operations to
lessen the effects of any potential disruptions in the future. The methods are focused on minimizing and
managing interruptions by quickly examining several commercial business items of the corporation.
Conclusion:
The robust terrible effect of the COVID-19 outbreaks on the global automobile supply chain was felt in
addition for businesses inside the TR42 area. Due to a breakdown in the supply chain originating in
China, which serves as the principal supplier of raw materials and semi-finished products for the
automotive industry, many primary and sub-enterprise groups operating in the region may need to shut
down production lines between March and June 2020. On this system, the majority of the organizations
have benefited from national financial assistance programs (short-term working allowance, respiratory
loans, loan configurations, etc.) and have chosen to allow their employees to take advantage of annual
leave and/or expand their flexible/distance working practices. By June 2020, demand for domestic
products is expected to soar as more people choose private vehicles over public transportation and
banks drastically cut the interest rates on auto loans. Most businesses have delayed their start dates in
order to comply with local government requirements put in place as a result of the epidemic, safeguard
the staff's health and safety, and avoid congestion at profit-related points. As of June 2020, the dealers
must continue to provide service while cutting back on their hours. The earnings from new cars were
particularly negatively impacted by this situation. Indirectly, the slowing in customs procedures brought
on by reduced time beyond regulation procedures due to pandemic conditions and labor shortages
caused by disorders causes significant issues in the purchase of raw materials and intermediate products
by businesses. All automobile industry producer stakeholders are included in the nine as a result of this
strategy. With the goal of reducing human-based risks and the potential benefit of updating their
manufacturing systems, they invest in or plan to build robotic structures (agency, Innovation and
Infrastructure). Additionally, the businesses carry out generation-based clinical research to find
remedies for economic and environmental problems, enhance them, and boost operational
effectiveness. The majority of the major corporations and significant sub-agencies throughout the region
received COVID-19 relaxed manufacturing certificates from the Turkish Standards Institute (TSE) (for
example, Renault, TOFA, and Ford Otosan).
Hypothesis 1. The company’s production and supply operations were affected by the disruptions such as
shortage of raw materials/spare parts, availability of transportation, availability of labor, demand
fluctuations, new health and safety regulations, etc.
Hypothesis 2. The company’s production keeps ground and logistic warehouse personnel did not hold
the place of work secure and healthy. Moreover, 70.27% of the producing store floor employees and
seventy-three.80% of the logistics and warehouse personnel said as they violated the social distance
rule because of the requirements of running inside the production facility. Therefore, employees were
involved about the possibility of the COVID-19 infection which affected the properly-being and
intellectual fitness of the personnel. Contrarily, the managerial employees felt secure operating at the
workplace surroundings which has fewer humans running due to far flung operating alternatives and
efficient protection from COVID-19 infection.
The results of the semi-mounted interviews and questionnaires gave information about the significant
issues that will arise in the company's supply chain operations at an undefined point in the pandemic's
future. Due to the COVID-19 pandemic, the case employer experienced extremely difficult events
throughout the course of the previous year, from mid-March 2020 to late April 2021. The main issue
throughout the COVID-19 breakout was that the employer and the considered business were
unprepared for the dangers and effects of the disruptions. The management team didn't foresee the
coronavirus spreading and becoming a global epidemic, and there weren't any warning indications or
symptoms either. It presented itself as a chance as a local or neighborhood annoyance that had a
momentary impact at the Asian establishment. However, the coronavirus outbreak has significantly
accelerated. The empirical results show that the case study employer has already been identifying
hazards and mitigating them in the delivery and production aspects of the operations, both proactively
and reactively. To prevent future possible interruptions, it's crucial for the company to recognize and
appreciate the risks. However, due to its reactive business characteristics, the corporation's activities are
tailored as in "just-in-time" (JIT), which means low stocks and short lead times. As a result, it is very
difficult to anticipate operational risks. The agency's risks and disruptions might be designated in a
variety of organizations. (htt84)
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