Continental Automotive building the supply chain of the future with strategic shifts

Founded in 1871, Continental has been inventing, developing, producing and marketing indispensable and pioneering technological solutions for sustainable and connected mobility of people and their goods. The technology company that offers safe, efficient, intelligent, and affordable solutions for vehicles, machines, traffic, and transportation believes that progress arises from change. To understand how the automotive company is making headway with change in its supply chain and logistics operations, we reached out to Sandeep Raman Sharma, Head of Supply Chain Management, Continental Automotive India.

Mr Sharma, in this exclusive interview, shares with us the organisation’s business activities to drive sustainable change, their resilient sourcing strategy in a tight semiconductor market, utilizing digitalization to future-proof their supply chain, and much more. Edited excerpts:

Continental Automotive in 2019 had been identified by CDP as a global leader in its measures and strategies for reducing emissions and for managing climate risks in the supply chain. How is the organisation driving sustainable change throughout the value chain?

In Continental, we shape the sustainable future with our products, services, and operations and reduce adverse impacts across our value chain. Our business activities thereby create economic, social, and ecological value for all of our stakeholders and society. Our sustainable business practice is based on our company values, codes of conduct, respective rules, and policies as well as international frameworks. We have identified four sustainability focus areas.

First, we will strive for 100% carbon neutrality along our value chain. Secondly, we strive for a 100% emission-free industry. Thirdly, we strive for 100 percent closed resource and product cycles, and lastly, by 2050, Continental seeks to transform its value chain based on responsible sourcing and business partnerships. In a responsible value chain, every partner creates economic, social, and ecological value for society.

With our Green Supply Chain Mission, we intend to integrate environmental thinking into our end-to-end supply chain management, including product design, material sourcing, and selection, of manufacturing processes, delivery of the final product as well as end-of-life management of our products after their useful life.  

In the year 2020, Continental switched its global electricity supply for its production to completely renewable sources. We aim to achieve complete carbon neutrality along our entire value chain together with our sourcing and other service partners. Citing an example of one of our sustainable initiatives at Continental’s Bengaluru Plant, 60% of the product packaging derived from the plant can be reclaimed. This has helped the plant to recycle 1.19 of 1.28 tons of waste generated in 2018.

After COVID, the recent Ukraine invasion of Russia is wreaking havoc on global supply chains. What impact does it have on Continental Automotive’s supply chain and how are you mitigating the risk brought upon the supply chain by this recent mishap?

Continental is deeply concerned about the war in Ukraine and the lives and wellbeing of the civilian population affected by the crisis. We are closely monitoring the impact of this crisis on our entire supply chain including supply streams for raw materials where the market is already extremely tight, transportation of material and goods as well as the global sanctions imposed on Russia. This also applies to our delivery relationships with Russia and Ukraine, especially given the current situation.

We have one supplier in Russia with no physical shipments. In Ukraine, we have only one active supplier delivering mechatronics / assembled cables to Continental plants. No major direct impact is currently foreseen. Continental employs roughly 1,300 people in Russia. Continental has no locations in Ukraine.

How do you plan to optimize your supply chain? Are your optimization methods based on cost-saving or agility?

To understand the answer to this question, it is important to first comprehend the basic definitions of an Agile Supply Chain and Cost optimized Supply Chain. An agile supply chain refers to the supply chain that can react quickly to changing customer/market demands, reacting quickly to unexpected events or disruptions in the supply chain while maintaining customer expectations, staying competitive always, and growing the business. On the other hand, a cost-optimized Supply Chain refers to the management of supply chain costs effectively to achieve the best possible return while ensuring reliable supply.

Therefore, in my opinion, a cost-optimized supply chain is a subset of an agile supply chain and that is why in Continental, we have been striving to have an agile, responsive, and resilient supply chain with a focus also on cost optimization. For example, we have been working on smart warehouses within the Smart Factory concept incorporating AR/VR technologies for our warehouse, implementation of RPA in warehousing processes, and use of Cobots in packaging finished goods, etc. These measures will not only focus on cost optimization but also drive towards an agile and nimble supply chain by enhancing productivity always through automation.

This is an abridged version of the original interview that was published in the April edition of the Logistics Insider magazine. To read the complete article, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *