Inventory management of Audi Supply Chain Management

Inventory management has huge significance in ineffective supply chain management. Without inventory management, automobile manufacturers like Audi cannot achieve success. In the automobile industry, inventory plays a key role in the production process. Different components have to be stored in the inventory so that at the production time they can be utilized. If the inventory is not managed appropriately than the delay in the production or total shutdown of the production unit can occur. The latest inventory management technologies and AI are now utilized for managing the inventory. The latest inventory optimization and scheduling software allow the organization to manage the inventory effectively (Beheshti, 2010).

Risk management Strategies for external environment factors

The external environment factors have no doubt affect the supply chain activities heavily. For controlling or mitigating the impact of external environment factors risk management strategies are needed. The top management of the organization now creates such risk management strategies which allow them to mitigate the impact of external environment factor up to a lot of extents. Audi can take the help of various business analytics software or AI to predict future changes in the external environmental factors. Through such initiatives, the organization can create effective risk mitigating strategies (Gupta, 2016).

Accurate Cost Control

The management of cost is necessary for the Audi Corporation so that not only the profit of the company can be maximized but also the organization supply chain activities can become more effective. If the cost of the organization is not going to be managed than the cost of the supply chain activities will increase which will bring various challenges for the company. The cost of the organization can be mitigated through effective budgeting and resource allocation. The organization can utilize the latest technology to identify the tasks where most of the costs are occurring. By doing this the organization can reduce costs up to a lot of extents (Campbel, et al., 2011).

Enhancing Quality Control

Enhancing quality is necessary because the customers want a high-quality product with zero errors. As Audi creates luxury goods the customers pay a premium price for the vehicles. It means that the customers expecting high quality from the company. The errors or faults in the product not only reduce customer loyalty built also declines the reputation of the organization. The solution to this problem is to enhance the quality control mechanism in the organization. The quality control mechanism at Audi is quite effective. the various standards which Audi has implemented have allowed Audi to create high-quality vehicles.

Conclusion & Recommendation of Audi Supply Chain Management

It is concluded that Audi has partnered with the number of suppliers who deliver various components to the organization. It means that Audi is performing Multi sourcing instead of a single source. The organization supports the local institutions for providing the supplies for the production of the vehicle. The organization pays special attention to sustainability and it has asked its suppliers to follows the sustainability requirements set by the organization. The external environment factors have a huge impact on the supply chain activities of automotive companies. The global nature of the Audi business gets affected by the external environment factors which include political factors, economic factors, legal factors, and technological factors, etc. the trade deals, tariff, and cost of the export or import parts have a significant impact on the supply chain of Audi.

It is recommended to the organization to ensure high-quality standards so that issues in its automobiles can be reduced up to a lot of extents. However, still, some failures occur in the product due to ineffective supply chain activities. The organization has set standards for its suppliers so that such issues can be mitigated. Over the years issues like problems in the control module of the cars have been immersed. In the future, the organization will have to maintain high-quality standards so that such issues won’t occur in the future. Focusing on effective inventory management is necessary so that shortage of components can be mitigated because the shortage of inventory leads to shutting down production which will ultimately decline the revenue of the organization.

References of Audi Supply Chain Management

Audi, 2020. Company. [Online]
Available at: https://www.audi.com/en/company.html

Beheshti, H. M., 2010. A decision support system for improving the performance of inventory management in a supply chain network. International Journal of Productivity and Performance Management, 59(5), pp. 452-467.

BRZOZOWSKI, A., 2020. Audi e-Tron Production Suddenly Suspended. [Online]
Available at: https://carbuzz.com/news/audi-e-tron-production-suddenly-suspended

Campbel, D., Edgar, D. & Stonehouse, G., 2011. Business Strategy: An Introduction. s.l. Macmillan International Higher Education.

cerroneseuropean, 2018. Causes Behind Control Module Failure in Audi Cars. [Online]
Available at: https://www.cerroneseuropean.com/causes-behind-control-module-failure-in-audi-cars/

Cordón, C., Hald, K. S. & Seifert, R. W., 2013. Strategic Supply Chain Management. s.l. Routledge.

Gupta, S. M. ed., 2016. Reverse Supply Chains: Issues and Analysis. s.l. CRC Press.

Kourdi, J., 2015. The Economist: Business Strategy 3rd edition: A guide to effective decision-making. s.l.: Profile Books.

Spender, J.-C., 2014. Business Strategy: Managing Uncertainty, Opportunity, and Enterprise. s.l. OUP Oxford.