logistics

Topics: Renault, Automotive industry, Japan Pages: 4 (1000 words) Published: October 22, 2013

“The automobile industry versus the economic crisis”

The economic crisis in 2008 has shown that the global economy is not as rigid and indestructible as it was thought to be. The crisis has brought staggering levels of unemployment, even to the most prosperous and sturdy economies of the world, a sharp contraction within the labor market, it has reduced consumer spending in general and it shook currencies and GDP’s to their foundations. Not to mention the required bailouts which were paramount to the rescue of the financial systems of the wealthiest nations, after the collapse of larger financial institutions around the world. (e.g. Bear Stearns)

The automobile industry, like every industry, suffered from the financial crisis. A steep rise in the unemployment rate was recorded, and in the US alone, the crisis accounted for around 500.000 people losing their jobs in the industry. The global demand for cars decreased as the purchasing power of the people declined, and the entire automobile industry was weakened by a substantial increase in the prices of automotive fuels1.

A specific question that comes to mind is, whether push and pull oriented supply chains suffer to the same extent of the economic crisis, or if one or the other is less or more affected.

A pull oriented automobile supply chain is relatively easy to explain; the inventory-order interface in this case, is designed for the consumer to place an order, and with it, he or she creates firm demand. A push oriented supply chain in the automobile industry works with an opposite inventory-order interface, namely the products are built, distributed, and ready for consumer demand. In this case the products waits for the consumers, while in the pull supply chain, the demand of the consumer creates the product.

Over the last decade, the customers have gained massive power over buying decisions, in large part because of greater access to information (internet). This increased...

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