Development of a Method to Increase Flexibility and Changeability of Supply Contracts in the Automotive Industry

The electric mobility market is characterized by demand volatility and a changing supply chain with new to the industry suppliers. In order to cope with demand volatility, the production capacities must be synchronized with external supply chain partners through changeability and flexibility measures. We define flexibility as the ability to quickly react to changing demand volumes within the current supply chain and production structure. Changeability needs further investments to adapt to the changing environment. This paper presents a method for the design of flexible and changeable supply chains, predicated on an examination of two companies' production systems and two different supply contract designs. We consider a quantity flexibility contract and a new developed contracting matrix. The method is being validated by a prototypical application in the production of electrified automotive powertrains. The results show an increase in supply chain flexibility for the quantity flexibility contract and we are able to introduce a changeable supply chain with the use of the contracting matrix.