Demand Management by Auto Component Manufacturers - A Study of Strategies

Demand for most of the consumer products fluctuates over a year due to various competitive reasons. In such scenarios, demand management is an important tool for meeting the demand. In automobile sector, the role played by auto-component manufacturers (ACMs) is very important as they have to to keep the assembly lines of the automobile manufacturer (s) running under varying demand scenarios. With huge investments, the industry provides varied economic dividends. Being a single source of supply or a supplier to many segments, the responsibility of the ACMs is very high. Both in the short term and long term, they need to adopt sales and manufacturing strategies to manage the fluctuating demand. The paper apart from identifying the role, principles and mechanism of demand management also provides the results of the research study undertaken to find out the strategies adopted by ACMs for managing the demand in India. The results show that their strategies revolve around capacity, workforce, price discounts, sub-contracting and plant closures, depending on the severity of the situations.