Monday, October 7, 2013

Ordering cars online

Technology has enabled customers be a part of the supply chain.  Through computers, they can custom order specific characteristics of something like dress shirts to cars.  The benefit of custom ordering to manufacturers is that helps them to be lean.  For something like shirts, it enables the company to reduce fixed costs by not requiring warehouses to keep inventory.  This trend is also seen with car manufacturers.

With all the options available for all of a manufacturer’s different models, car companies have to make many cars and hold them in inventory until they shipped out to local dealers.  Nowadays, most car manufacturers have a build and buy option on their websites.  This allows customers to customize their desired vehicle and have them delivered to their local dealer for pickup.  By more accurately determining customer demand, car manufacturers can manage their production to minimize their costs and become more lean.  Do you think that the auto industry will make a transition to only offering cars by customized order?  Or will we continue to see the current system most sales coming off dealer lots and only some being customized and delivered?

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