Sustainability in the Supply Chain of the Automotive Industry

After the big effort in the CO2 emission control and reduction in the car motors, the industry is pointing at the supply chain and design. The question comes, how much CO2 is used to produce a car? How can it be controlled? Some even argue the impact on the CO2  in a car production depending on the electricity type (nuclear, green, carbon,…) in the production country.  Resuming, in over all further questions are coming in how to deal with sustainability inside the car industry.

On the other side, everybody knows that the supply chain from automotive industry is one of the most complicated because of the aggressive purchasing strategies in low-cost countries, the car platforms manufactured around the world and because of the component levels (one component can have from six to ten levels of suppliers).

Ford is an example on how car manufacturers OEMs are facing straight forward the sustainability in supply chain. In their web, they show their approach on it. One key question in their point of view is building strong relations with suppliers with the intention on influence them and afterwards building shared commitments on sustainability.

Furthermore, may OEMs, car manufacturers have developed indexes on sustainability in car design (i.e. Ford PSI, product sustainability index). These indexes give environmental impact through the whole car life-cycle. These indexes influence design decisions,  so cars are greener from the very beginning. Also some decisions on suppliers are affected by the index.

But, how do suppliers commit to sustainability? and how can an OEM guarantee it?

With the effort of big OEMs of passing through the chain the sustainability responsibilities, one department which is taking a big stand now in automotive companies is compliance department, in charge of forwarding corporate social responsibilities to the suppliers. Compliance normally is responsible to motivate and get signed confirmations of suppliers accepting the environmental (among other) directives and guidelines from customer(s).

It needs to be said, that in terms on Material Management and environment, many OEM base their sustainability on the guidelines of the  AIAG (Automotive industry Action group) and EU and/or ISO norms and regulations, like ELV (End of life vehicle) EU 53/2000, REACH or ISO 14.001.  These old norms clearly have guided the acceptance values on toxic materials for years (They have directly impact on suppliers).

In my opinion, All these efforts of motivation of sustainability  in the suppliers chains can be only successful by regulation and laws encourage like in material management and it is about time that it happens.

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