Mitigating strategies in the supply chain

: automotive industry

Abstract

The automotive industry, with a history spanning over a century, has witnessed significant changes in its supply chain dynamics over time. Consequently, the strategies employed to mitigate risks within this industry have evolved accordingly. As the automotive sector continually evolves, operational strategies employed a decade ago are subject to replacement or adaptation. This evolution needs a corresponding adjustment in the approach to mitigating geopolitical risks faced by automakers. Strategies that were effective a decade ago may now be outdated and insufficient to address contemporary challenges. Currently, there is sufficient literature on mitigating strategies within supply chains. However, within the automotive industry, there is a lack of consensus in current literature regarding the optimal strategies to employ when confronting geopolitical risks. Therefore, this study aims to answer the following research question: Which are the most influential geopolitical conflicts impacting the automotive supply chain and logistics and which strategies could mitigate them. For this purpose, this study presents a comprehensive review of mitigation strategies for geopolitical risks in the automotive supply chain. Drawing upon a systematic literature review, with the use of secondary data, the study analyzes various geopolitical risks faced by the automotive industry, including those arising from events such as the US-China trade war and the Russia-Ukraine conflict. Through an examination of industry-specific responses and strategies, the research sheds light on the interconnectedness of geopolitical events, supply chain disruptions, and organizational decision-making. This research concludes that the optimal strategy for companies varies depending on their organizational structure. Multinational automakers may find nearshoring to be the most advisable strategy, leveraging proximity benefits and reduced transportation costs. On the other hand, non-multinational entities are advised to prioritize collaboration as a means to mitigate geopolitical risks in the supply chain.

Date of Award	15 Jul 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Jorge Julião (Supervisor)