Method for Optimizing Supply Chain Flexibility in the Production of Electrified Powertrains

Electromobility is one of the main solutions for tackling current challenges such as climate change or the scarcity of fossil resources [1]. Currently, there are large uncertainties regarding future production volumes of electric vehicles with forecast for 2025 varying between 4 % and 38% [2]–[4]. This demand volatility combined with rising importance of supply chain partners requires a fast adaptability of production volumes within the supply chain leading to a higher need of supply chain flexibility [1]. In this paper we present a method to optimize the contractual volumes between two supply chain partners coordinated by a quantity flexibility contract with fixed flexibility. Specifically, we examine whether a quantity flexibility contract fulfils its coordinating role in settings of changeable production systems. We validate our method with an example from the production of electrified automotive powertrains. The results show that we can further improve both costs and supply chain flexibility but that the coordinating role of the quantity flexibility contract is limited.