Competitiveness in times of change – the demands on automotive suppliers are increasing

Never before has such importance been attached to the term “competitiveness” as in current times. The Covid-19 pandemic and increasing geopolitical tensions have highlighted the vulnerability of previous models of success and are posing unprecedented challenges for the supplier industry. In this article, we look at what the automotive industry, in general, and what MD, in particular, is doing to remain competitive and even to expand.

Price stability in difficult circumstances

In light of recent developments, the challenge for suppliers to maintain competitiveness in a fast moving sector such as the automotive industry, has never been greater. Recent years have been marked by crises (Covid, chip shortages, Ukraine, inflation) that have exacerbated the cost situation in the automotive supplier industry. Increased demands for “sustainability” and the trend towards “deglobalization” or regionalization are also generating higher expenses. Stable prices appear inconceivable. At the same time, price stability continues to be an important factor in automobile manufacturers’ decision-making and purchasing processes. To ensure a long-term partnership, customers require a constant price level. However, the price development of all components in the automotive industry is increasing along the same lines as the Consumer Price Index. These points are putting all links in the supply chain under immense price pressure, meaning that creativity is required in order to maintain customer satisfaction. Consequently, aspects other than price are inevitably gaining more and more importance as well.

Complexity, sustainability and future viability

The increasing emphasis on ethical aspects as well as new, legal requirements are playing an increasingly central role in calls for tender. The establishment and observance of a Code of Conduct which covers legal requirements, moral guidelines and environmentally-responsible behavior has become indispensable and a strict customer precondition. Sustainable and resource-saving supply chains and production processes are promoting the trend toward regionalization and decarbonization. Against this backdrop, sustainable business practices are exerting considerable influence on the future viability of a company.

At the same time, the diversity of variants, and therefore complexity, is clearly increasing. There is no longer one single standard. Rising demands for vehicle equipment along with the rapid technological transition in the automotive industry to electric mobility and autonomous driving are leading to increased demands for safety, quality and performance. This goes hand in hand with the need for considerable research, development and investments, which suppliers have to master in order to remain competitive in the long-term. 

What is MD doing to make itself competitive?

Triggered by this situation, MD ELEKTRONIK has also had to grapple with this problem on a global scale. To guarantee the highest level of customer satisfaction and to reduce the ripple effects of the far-reaching events of recent years, we have opted for the following strategies to secure our competitiveness in challenging times:

Automation: for decades, in our in-house Development and Mechanical Engineering department, has been researching and working flat out on automation concepts that meet the demands, norms and standards of the future. Our sophisticated and innovative automation systems along the entire production chain are far superior to the previous, manual production methods. The modular machine system, that we have developed in-house, ensures a flexible, replaceable and upgradeable production line. Thanks to the resulting higher efficiency and flexibility, these systems are able to keep pace with the increasing diversity of variants and the rapid transformation. Rejection rates are also significantly reduced due to the decreasing human influence on the production process, which saves costs and resources. Through automation, MD is achieving higher product quality and greater sustainability, and is now able to efficiently meet new customer requirements more quickly.

Know-how and customer support: MD provides support on-site, at the customer’s premises. Our “global footprint” with plants, sales offices and tech offices in America, Europe and Asia, and the associated proximity to customers and reaction times, are additional factors that make MD a reliable technology partner.  We combine proximity to our customers with technical expertise. Our experience in all aspects of the data cable production process, as well as knowledge of developments at OEMs, committees and chip and component manufacturers, allow us to remain one step ahead when it comes to research and development – to the benefit of our customers, who get to profit from this head start.

Summary and conclusion: Adaptability – the key to success 

Price is still a decisive factor for winning or losing an order. However, the current structural transformation with increasing demands on quality, technology, sustainability, flexibility, speed and delivery capacity, is leading to the creation of new rules of play.

The growing requirements on vehicles of today and the future are demanding equally high levels of quality and technological innovation. For the automotive industry supplier, taking targeted action at an early stage is opening up opportunities to benefit from know-how and specialization along the value chain. The key premise is to be able to offer the customer added value which then places it in an improved competitive position. At this crucial time, MD ELEKTRONIK is relying on automation, flexibility and a technological partnership on an equal footing with our customers. 

Turbulent times demand adaptability, such as that demonstrated by MD.

Contact our Sales Team for more information on what MD can offer you!

Ronya Stepputtis

Ronya Stepputtis has been working as Key Account Manager in the international sales team at MD ELEKTRONIK for 4 years. Her core tasks include acquiring and supporting customers as well as planning and implementing business opportunities with international customers. This involves working actively in interdisciplinary teams with customers and colleagues to successfully implement vehicle projects.