The real problem in the automotive supply chain is design, not disruption

In 2015, the late Fiat Chrysler CEO Sergio Marchionne called for urgent reform in the automotive industry through his now-famous memo, Confessions of a Capital Junkie. In it, he argued that automakers were wasting billions by duplicating efforts and clinging to outdated business models. He ended the memo with a quote from Through the Looking Glass, where the Queen tells Alice: “It takes all the running you can do to stay in the same place. If you want to get somewhere else, you must run at least twice as fast!”

Marchionne was appealing for structural change. It was powerful at the time, but ten years later, it feels visionary.

Having grown up in Michigan and worked in the automotive industry all my life, I’ve never seen disruption at this pace. Tariffs. Ro-ro vessel shortages. Delays on EV battery shipments and new plants. Even if you can run twice as fast, you end up in the same place. Speed and resilience matter – they always will. But if the industry really wants to go somewhere else, it needs to change direction and re-design supply chains for the future.

The real issue isn’t disruption…

It’s that automotive supply chains were built more for cost efficiency than volatility. Global sourcing, lean inventories, just-in-time logistics: these strategies made sense when the world was more predictable and globalisation was a given. But in today’s more fractured and uncertain environment, these same strategies can leave OEMs exposed.

In January, Economist Impact’s Trade in Transition report - supported by DP World - revealed that nearly one-third of industrial companies are turning to "friendshoring" to rebalance such risk. It said the main challenge for American automakers - and potentially their European and Japanese counterparts - will be to anticipate which markets will offer stable, long-term trade and investment conditions, making them viable locations for new manufacturing facilities both financially and strategically.

This holds true. OEMs find themselves between a rock and rabbit hole, uncertain which path to take, and sprinting to stay where they are. So, what now?

A new blueprint

As Tiemen Meester, Group Chief Operating Officer for Ports & Terminals at DP World, recently discussed with Automotive Logistics, evolving OEM demands are raising the bar for supply chain infrastructure. It’s now time to redesign the supply chain for agility, clarity and control. One that gives OEMs a fully integrated toolbox of services: end-to-end, tech-enabled and adaptable by design. This is the foundation of a modern supply chain.

Here’s what that looks like in practice:

• End-to-end as standard: Supply chains work better when they work as one. From inbound logistics and manufacturing support to finished vehicle delivery and aftermarket flows, at DP World we’re creating a joined-up system that removes silos and shortens response times. This includes robust aftermarket capabilities - a growing market expected to hit the $1.2 trillion mark where nearly 70% of value is tied to replacement parts – built on a strong warehousing network. This helps OEMs move quickly and keep dealers stocked.
• Tech-enabled vision: Data is essential for clarity at each step. For example, through our Smart Logistics platform, we use advanced analytics and IoT to help OEMs see what’s happening and act faster. Our CARGOES suite automates customs and terminal processes, provides full visibility across shipments, and simplifies reporting. It’s not just visibility for visibility’s sake. It’s about giving supply chain leaders the tools to make clear, confident calls.
• Adaptable infrastructure: No two disruptions are the same, so the systems need to flex. That’s why we developed our industry-first Cars in Containers (CIC) solution - using 53-foot intermodal containers and custom racking to move vehicles when ro-ro space was tight. It’s an example of how we could move rapidly to deploy a customised solution in response to dynamic environment. We ended up moving 30,000 cars from Mexico to the US and Canada this way and are exploring other high-pressure markets. For the EV era, we’re also ready with bonded storage, charging infrastructure and battery-ready terminal layouts in key locations.

Taken together, these pillars form a supply chain model ready for today’s complexity and designed to move the industry forward.

You don’t have to go it alone to get somewhere new

For too long, OEMs have run harder and faster, often alone, just to stand still. Marchionne’s Wonderland metaphor still has its hold. But as Alice learned in the fantasy, staying in place isn’t inevitable - it’s a consequence of the wrong rules, the wrong logic, the wrong design.

To move beyond the looking glass, the industry must stop sprinting through a maze of outdated systems and start shaping a supply chain that actually leads somewhere new. That means collaborating, not just coordinating. It means designing logistics systems with built-in flexibility and foresight. And it means knowing when to partner in ways that reduce friction, not add to it.

The road ahead has always been challenging for automakers. But with the right design, we can move past reactive logistics and towards something far more revolutionary: a supply chain on the front foot.