When One Missing Part Can Stop a Production Line: How Marelli Is Transforming SIOP

One missing semiconductor can travel a long way through an automotive supply chain.

At Marelli, a shortage originating from a single wafer-fabrication source could propagate through multiple plants and countries before reaching the vehicle manufacturer. In one real example, it had the potential to affect 13 customer plants and more than 13 finished vehicle models.

Look at the network from the other direction, and the complexity multiplies again. A change in demand for just one vehicle could be reflected across four Marelli divisions, six plants, and more than 500 suppliers.

Managing those dependencies was becoming increasingly difficult. Marelli operates almost 90 plants across 21 countries, with six business units, 18 different ERP systems, around 350,000 components, and 50,000 finished goods.

“Impossible to manage, impossible to deal, impossible to predict and to follow the request of our customers,” said Carlo Chiarle, VP Global Head of Manufacturing Operations & SIOP at Marelli.

Over the past three years, Marelli has been working to replace that fragmented model with an integrated SIOP process built around shared data, end-to-end visibility, and faster decision-making.

When one component affects the whole network

The scale of the interdependencies became particularly clear during the electronics shortage.

Chiarle described one real scenario in which a single wafer fabrication source fed a subcomponent that moved through three Marelli plants, then seven more plants across five countries.

If that component was missing, the impact could eventually reach 13 customer plants and more than 13 finished vehicles.

“Long story short, if something is missed, we can affect 13 plants for one customer,” Chiarle said. “Impossible to manage, unacceptable from the customer’s point of view.”

The same complexity worked in the other direction.

A demand change for one vehicle could affect four divisions, six Marelli plants, and more than 500 suppliers.

The problem was that those parts of the organization were not always responding as one network.

The cost of working in silos

Marelli’s business units had traditionally operated with a high degree of independence.

When shortages appeared, individual teams sometimes reacted by increasing component orders to protect their own production.

That could make the problem worse elsewhere.

“One organization, they started demanding components to be sure that they were able to produce their own finished goods. But the other business units were affected,” Chiarle said.

The result was a form of internal cannibalization.

One part of the business protected itself while another lost access to the same constrained supply.

The company could end up unable to provide customers with the complete set of components required to build a vehicle.

For Chiarle, solving that required a change in mindset as much as a change in planning technology.

Creating one company view

Marelli set out to build integrated end-to-end visibility that could be used across manufacturing, supply chain, finance, purchasing, HR, and other functions.

“The biggest effort that we have accomplished all together was to demonstrate that this CIOP is really a company tool,” Chiarle said. “Is not a supply chain tool, is not a manufacturing tool, is a company tool, where everybody use the same source of information.”

That principle became central to the transformation.

The aim was to replace different functional interpretations of the business with one shared view of demand, inventory, capacity, supply, and customer requirements.

Marelli also restructured its supply chain organization around integrated planning, logistics management, and material management.

People remained central to the model, supported by digital capabilities designed to improve the quality and speed of decisions.

Spending less time chasing information

One of the clearest problems in the old model was how much time teams spent finding information.

By the time the organization had assembled the facts and started solving one problem, conditions could already have changed.

“We were spending so much time looking for a solution for a problem that maybe another problem, a bigger problem, starts affecting the line of our customer,” Chiarle said. “And we were still working, trying to deliver what they asked us two weeks before.”

Marelli wanted planners to work from information that was constantly updated.

That meant moving away from people spending their time chasing data and toward using that time to solve the underlying problem.

The goal was straightforward: improve customer satisfaction while increasing the profitability of operations.

Building for customer volatility

Automotive demand can shift quickly.

Chiarle said Marelli has seen customers fluctuate demand by as much as 30% month to month.

That volatility creates a difficult balancing act.

Production has to adjust quickly enough to protect customer service, but without creating unnecessary inventory.

“Sometimes our customer used to fluctuate 30% monthly. So we need to be able to adapt and adjust our production coherently. Avoid generating extra inventory. That is the final goal.”

An integrated planning model gives the organization a better chance of evaluating those changes across the whole network rather than reacting plant by plant.

Extending visibility into the supplier network

Marelli’s first stage of SIOP integration improved visibility across its internal organization.

The next step is deeper supplier collaboration.

Chiarle describes this as SIOP Plus.

The aim is to understand supplier problems earlier and work with partners before those risks reach production.

“The integration will never be completed,” he said. “We will always find the next step ahead that is meaningful to be done.”

That matters particularly for risks such as semiconductor shortages, geopolitical disruption, and components approaching the end of their available supply.

A request from a customer to continue using an existing component may appear straightforward, but it can create future risk if the supplier will no longer be able to produce it.

The earlier Marelli can see that issue, the more options it has.

Moving beyond emails and tribal knowledge

Supplier integration also requires better information exchange.

Chiarle was clear that emails, phone calls, and informal knowledge are no longer sufficient for managing a network of this scale.

“Not possible to manage tribal information, sending email, asking, give me feedback, give me a confirmation if these components can be delivered or not,” he said.

Marelli is integrating EDI connections with suppliers so that supply information can become part of the planning process directly.

The aim is to create a more digital relationship where suppliers can signal problems earlier, and Marelli can respond faster.

“Problems will be there forever. We need to be able to accelerate the resolution of those problems.”

Making the system fit the way the business works

Chiarle also highlighted the importance of flexibility during implementation.

Marelli needed a solution that could reflect the realities of its organization without abandoning standardization.

“o9 has been very good to be flexible, to make a tailor-made, standardized, always standardized solution, but tailor-made to listen where it can be and need to be changed,” he said.

That flexibility mattered for adoption.

People who have worked in a certain way for years are rarely enthusiastic about being told that a new system is automatically better.

Marelli even introduced what Chiarle called an “Excel ban action” to encourage teams to move away from local spreadsheets and toward the integrated system.

Treating SIOP as cultural change

For Marelli, the transformation has gone beyond implementing a planning platform.

“SIOP Plus is not a tool of logistics, need to be considered as a cultural change that needs to be applied in the whole organization,” Chiarle said.

That means involving stakeholders early, training people, bringing manufacturing sites into the journey, and making the shared data source trusted enough that users stop reverting to calls and spreadsheets.

It also means scaling carefully.

Marelli started with a pilot in one business unit, expanded into additional regions, and then developed the program into a global initiative.

“You need to do step-by-step,” Chiarle said.

The transformation is still evolving.

But the direction is clear: fewer silos, less time spent searching for information, stronger supplier collaboration, and a shared view of the network that helps the business respond faster when conditions change.

As Chiarle put it in his closing message, long-term advantage will increasingly depend on that ability to respond.

“It's not the strongest. It's not the most intelligent that will survive, but it's the most responsive to change.”