Getting the foundations right: the 4Ps of the automotive value chain

The automotive value chain has been constantly evolving. With the introduction of electric vehicles (EVs) into the market, Akolade discussed how to navigate this changing world with Mike Chaffins.

The world of manufacturing is constantly changing – with new manufacturing supply chains influencing the way we think about production. Mike Chaffins – Sr. Director of Supply Chain & Purchasing, Nikola Motor Company, shares his lessons learned from a rich career in the automotive industry.

What was the biggest challenge you faced when developing a supply chain for a start-up industry?

MC: I’ve been fortunate in my career to be part of two manufacturing start-ups. In the mid 90’s, I helped launch the Mercedes-Benz M-class SUV and now I’m at Nikola helping to release our innovative hydrogen-electric semi-trucks and electric off-highway vehicles.

The biggest challenge we faced at Mercedes was nailing the 3P’s: people, process and plant. We launched the first Mercedes-Benz plant in the US with new people, a new manufacturing process and at a new plant. Tackling these challenges was not easy; we hired automotive veterans in each discipline to apply, through trial-and-error, their lessons learned to help start-up the plant.

At Nikola, our challenge has been more complex as we add another P to the mix: product. Our hydrogen fuel cell semi-trucks will revolutionise the commercial vehicle market. We have a “dream team” of industry experts to guide us through the task who will systematically navigate the 4Ps to launch our manufacturing plant.

What advice would you give to those diversifying their manufacturing processes?

To take a sports analogy, companies need their “Jimmy & Joe’s Xs and Os”; they need to tackle the right people and the right plan. With these ingredients, they can systematically tackle the challenge of stamping their manufacturing footprint onto their respective industry landscape.

The EV supply chain is still an emerging field – what is the biggest challenge you faced with the manufacturing?

At Nikola, being the first player to introduce revolutionary technology to the market creates innate challenges for the supply base. We study our potential supplier’s manufacturing and technical capabilities and partner with those we see as a good fit to grow with us. It’s imperative we choose the right supplier partners as a vital part of our value chain. I encourage suppliers to play chess versus checkers and look 20 steps ahead into the future to make sure they’re ready when we are.

How to you build sustainability into your manufacturing processes?

To build sustainability into the value chain, we must take a holistic view of the depth and breadth of our tiers; realising the importance of each step of the process, from the advanced system suppliers to the dirt, as I like to say. Each step of the value chain is important as failure in any rung of the ladder will cause us to fall. It’s imperative that sustainable quality is built into the process at every tier of the value chain.

Where would you like to see manufacturing processes improve across the board?

As the world continues to “flatten” with technology and communication improvements, I foresee the continued emphasis on technology to ensure quality is built into manufacturing with robust checks and balances, and advanced communications alerting us in real time to any fractures in the rung on the value chain ladder.

How do you onboard and upskill people in this new field of supply chain?

Ownership is key, each employee must understand their impact on the entire organisation and see themselves as an owner. To refer to the earlier analogy, when I hire my “Jimmy and Joes”, I surround them with “Xs and Os” to ensure they are walking into an environment Day 1 where they have the right tools and are connected to the organisation, or as the sitcom Cheers said: “where everybody knows your name and they’re always glad you came”.

Mike will be sharing the full story of innovating supply chain processes in the ever-evolving world of automotive manufacturing in the upcoming ASCI2019 conference. Head to asci2019.com to register.