U.S. automotive manufacturing: How automakers can boost production in face of tariffs
As tariffs loom, automakers are ramping up production in the U.S. and leaning on smart factory concepts and collaboration to fast track projects.
While the job doesn’t call for driving at speeds exceeding 200 mpg in a performance racing suit, managing a vehicle or parts manufacturer’s supply chain does require making split-second, high-stakes decisions in highly unpredictable conditions. Supply chain AI is changing the game.
By taking a page out of the Mercedes-AMG PETRONAS F1 team’s AI playbook, automotive companies can get peak performance out of their supply chain and put themselves in a strong inside position versus the competition.
Intelligent systems fuel peak performance
Here in the era of tariffs, trade restrictions and other potentially destabilizing developments, cost planning and forecasting have never been more challenging, nor more critical, whether you run an automotive manufacturing business or an FI team.
In the case of the Mercedes-AMG PETRONAS Formula One team, a cost cap imposed by the governing body that oversees F1 racing restricts how much teams can spend on their cars in a given year, making financial efficiency a must.
AI capabilities are helping Mercedes-AMG PETRONAS F1 strike a balance between cost efficiency and high performance. For example, advanced, AI-driven predictive analytics tools are enabling effective deployment planning and cost forecasting so the team stays within prescribed budget constraints without compromising performance on the racetrack.
Using business AI embedded in its resource planning systems, the team can model and forecast costs, predict final budget needs, and optimize inventory levels in a matter of seconds. AI also can help gather and validate cost data for reporting back to the F1 governing body.
Supply chain AI: Precision planning
Ensuring reliable, cost-effective access to the 14,500 components that comprise the Mercedes-AMG PETRONAS Formula One W14 E race car is a massive undertaking that becomes eminently manageable with the help of AI-supported supply chain and inventory optimization capabilities.
Taking data from multiple sources across the organization, business AI capabilities are helping the Mercedes-AMG PETRONAS F1 team identify optimal pathways for sourcing critical vehicle components quickly and cost-effectively, and to validate inventory to prevent shortages of critical parts.
Race performance depends on even the smallest part, and the team now has precise control of its entire supply chain for parts and resources. With the help of AI’s recommendations and insights, they can quickly identify and adjust to unexpected supply chain developments, so they don’t find themselves in a pinch come race weekend.
AI also can help coordinate supplier collaboration to minimize disruptions due to material shortages and the like.
See how the Mercedes-AMG Petronas F1 team navigates the cost cap challenge HERE.
Peak performance with AI
In the world of F1 racing, just as in the broader automotive manufacturing mainstream, the use cases for AI in its various forms (agentic, generative, machine learning, etc.) are growing rapidly.
We’re seeing it assist in analyzing the vast amounts of data collected during tests and races to identify patterns that can help the Mercedes-AMG PETRONAS F1 team fine-tune its vehicles, producing the incremental gains that can make a huge difference in an F1 race — or in an automotive OEM or supplier’s operations, for that matter.
The Mercedes-AMG PETRONAS F1 team is also using predictive analytics and machine learning to adjust and optimize vehicle configuration and race strategies. It’s making extensive use of AI in the analysis of telemetry data to optimize vehicle performance, for example. AI-driven models also can precisely forecast weather and track conditions to inform team strategy.
As use cases like this are demonstrating, AI can function like a top-notch pit crew by providing a critical behind-the-scenes competitive advantage, whether you run an F1 team or an automotive company’s supply chain.