Blog

 

05

Jul

Supply Chain Sustainability and the Automobile Industry

Author: Rene Garcia

Sustainability in the Automobile Industry

As vehicles become more electronically complex and as more electrically powered vehicles take to the road, focusing on the source and procurement processes for the various resources that go into building these vehicles is more important than ever. More precisely, automobile manufacturers are receiving greater scrutiny over where they are getting the elements they need – like Cobalt – to build car batteries and how are they getting them? Not surprisingly, tracking these components through the supply chain can be challenging, and yield concerning results.

Is your vehicle the product of child labor?

Cobalt is an essential mineral used in the manufacturing of lithium-ion batteries that powers electric vehicles. Unfortunately, two-thirds of Cobalt is provided by the Democratic Republic of Congo (DRC) which contains roughly half of the world’s supply of Cobalt. Unfortunately, there are reports that some mines in the DRC are using child labor to extract the minerals. Those minerals could be part of any individual’s vehicle, smartphone, and any other device or machine that uses these types of batteries.

Since lithium-ion batteries are in such high demand for both vehicles and electronic devices, the price for Cobalt has increased dramatically, leading to a surge in smaller Cobalt mines popping up. These so-called “artisanal mines” are usually small-scale operations set up by local communities, and they are the biggest offenders of child labor, probably because they don’t have the same visibility as larger commercial mines. The Cobalt harvested here is then brought to market and mixed in with ethically mined Cobalt, leading to unwitting buyers purchasing supplies that were created using unsustainable methods.

Automobile manufacturers face supply chain visibility challenges

While it might be easy for automobile companies to simply commit to never purchasing Cobalt from artisanal mines, it’s not as easy to know that Cobalt dealers didn’t purchase from those same mines. Reports reveal that some Cobalt dealers were not investigating where their product was coming from or how it was harvested. These dealers then tainted their ethical supply, which ends up being used by consumers around the world.

The only workable solution for this problem is for automobile manufacturers to use a supply chain management software that gives them visibility on their suppliers’ certifications, ability to perform their jobs, and their reputation among supply chains. Without this necessary tool, companies are at risk of working with suppliers that can damage a brand beyond repair. Avetta provides an SCM solution that can give car companies the necessary insight to avoid these problems in the future.

Avetta’s supply chain management software helps businesses identify and mitigate risk within their supply chain through contractor prequalification, auditing, employee-level qualification and training, insurance verification and business intelligence. Avetta offers a proprietary SaaS platform that is highly customizable and adaptive for businesses of all sizes and is used by more than 50,000 customers in over 100 countries. Finally, the Avetta platform harnesses the power of reviews, allowing companies to rate their experience with suppliers, giving potential partners real-world insight into how a supplier will affect a supply chain’s risk profile.

Predicting that any one element would become such a prized resource is a difficult task. Predicting how potential suppliers will affect your supply chain doesn’t have to be. Get the insight you need and learn how Avetta can help you build a sustainable and ethical supply chain at https://www.avetta.com/clients/sustainability