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Is the automotive supply chain out of control?
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Insight
Jun 22, 2022
Is the automotive supply chain out of control?
A young toddler stops in the middle of a busy store and suddenly throws a tantrum. Their parents refuse to buy them the toy they asked for. They start screaming, crying and drawing attention to themselves. Is it fair to say the toddler is out of control?
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According to neuropsychiatrist Daniel J. Siegel and parenting expert Tina Payne Bryson, it’s due to an imbalance between the upstairs of the brain and the downstairs. In their book The Whole Brain Child, the two explain the science of how a child’s brain is wired. Essentially, there is a downstairs part of the brain where all the important functions live; breathing, blinking, innate responses and emotions such as anger and fear. The upstairs brain is more complicated and is where higher order thinking and planning takes place, imagining, analyzing, problem solving and decision making. The two levels of the brain are linked by a metaphorical staircase that facilitates the flow of information up and down the stairs from the upper and lower brain. This enables the upstairs to monitor the actions of the downstairs and calm strong emotions, reactions and impulses.
The screaming toddler may be out of control, but it’s because their upstairs brain is not yet fully developed – indeed, it won’t be until they reach their twenties. As the toddler becomes older, the upstairs and the downstairs parts of their brain continue to change, as do their behaviors as a result.
The upstairs – downstairs supply chain
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How might this apply to the automotive supply chain you are probably asking? Well for years, certain parts of a vehicle build have been simple to compartmentalize. Take the engine as an example. For most OEMs, the engine sits in the downstairs of the supply chain. It’s an important function of the vehicle but one that comes almost unconsciously. Most OEMs are designing and manufacturing their own engines, and have done for a long time. As a result, there is a comprehensive understanding of the costs associated with engine builds. OEMs can quickly and decisively make informed decisions about the cost of new materials and any perceived risk of changing material or components. Due to the familiarity of engine design, a slight change in material costs for improved performance does not send the supply out of control, since it is an understood operational cost that can be easily processed and justified.
However, as the sector transitions towards electric and autonomous vehicles, vehicle electronics will take precedence. In future vehicles, the internal combustion engine is out, and the Advanced Driver Assistance System (ADAS) is in. ADAS is essential as OEMs move from Level 2 autonomous driving to Level 3 and beyond, gradually affording more control of the vehicle to the car itself, and away from the occupants.
However, ADAS has long been situated within the upstairs of the supply chain.
As a relatively new technology, it can be seen as considerably more complicated and complex than the engine. Just as in the toddler’s upstairs brain, ADAS is where higher order thinking and planning takes place; scanning, analyzing, problem solving and decision making.
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By virtue of being upstairs in the supply chain, it’s still developing as OEMs become accustomed to advanced vehicle electronics, gradually understanding the effect of different materials and technologies for improved vehicle safety and reliability. Over time, these will become as vital to the running of vehicles as engines have been since the dawn of the car, shifting from an upstairs, cerebral function of a vehicle to the very foundation of its operation. It is therefore essential that investment in the materials used in ADAS hardware reflects their criticality to overall vehicle performance.
And yet, an understanding of the long-term performance and reliability improvements that a material change may deliver is absolutely critical. Therefore a cost increase carries a perceived risk that can not always be justified quickly or easily. By continuing to view ADAS as peripheral to success, OEMs could be missing out on significant vehicle performance, lightweighting and efficiency gains.
Moving from upstairs to downstairs
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To truly make the leap to Level 3 autonomy and beyond, OEMs will need to move ADAS from upstairs to downstairs when managing supply costs. This means opening the ADAS ‘black box’ and taking control; understanding how advanced electronics contribute to vehicle safety, the role of materials and their effect on vehicle performance, safety, and reliability.
As we see the supply chain ‘doors’ continue to open and facilitate collaboration more closely with partners, designers, electronics specialists and more. This promotes further knowledge sharing and collaboration, it is now possible to move ADAS from upstairs to downstairs without the supply chain spiraling out of control, preventing that toddler from their public tantrum.
Download our ADAS eBook to learn how OEMs can adapt to a new era in automotive.
