OEM Customers: Definition
The fragile automotive supply chain Internal and external disruptions, both severe and mild, constantly pressure the automotive supply chain and cause unanticipated reductions or stoppages of vehicle production. Internal disruptions include part quality issues, recalls, and supplier financial instability; external disruptions include fluctuating vehicle demand, shifting trade policies and tariffs, natural disasters, and unexpected global resource shortages. A seemingly unending wave of these “trigger” events exposed the fragility of the global automotive supply chain with alarming regularity (see sidebar). Even before the COVID-19 pandemic, OEMs struggled with supplier delivery issues, as evidenced by poor supplier-delivery performance ratings on supplier scorecards. Ongoing supplier performance issues prompted the International Automotive Task Force (IATF), in conjunction with several OEMs, to pilot the IATF Red Supplier status program in mid-2019. This program seeks to correlate...