The Hidden Risk: Why Certificate Management Is a Growing Challenge for Automotive
For manufacturers and suppliers – especially Tier 1 suppliers of Original Equipment Manufacturers (OEMs) – responding to tenders is part of daily business. Each tender presents a recurring challenge: demonstrating compliance with required standards and regulations. This often involves certificates to prove eligibility.
Certificates such as ISO 9001 (Quality Management), IATF 16949 (Automotive Quality), or ISO 14001 (Environmental Management) are frequently mandatory. Customers require these to ensure their partners meet regulatory and industry-specific standards.
However, as supply chains grow more complex and certification requirements evolve, managing certifications has become difficult. Keeping track of valid, up-to-date documents across sites and regions adds to this challenge. Even a single expired or missing certificate can delay contracts, trigger audits, or result in disqualification from key business opportunities. In addition, relying on third-party or Tier-2 suppliers with outdated or missing certifications can expose companies to significant compliance risks and potential disruptions across the supply chain.
The Cost of Compliance
The cost of compliance extends beyond certification fees—it includes the administrative burden of tracking renewals, coordinating across global teams, and ensuring that every document is accurate and audit-ready. Missed renewals or outdated certificates can pose a significant business risk, leading to production delays, disqualification from bids, or damage to business relationships.
The challenge lies not only in possessing the correct certificates – managing and submitting them repeatedly is integral to the process. This is a mandatory requirement for all new tenders received, each time a certificate reaches its expiration date, and through every customer’s uniquely structured supplier portal.
Furthermore, the complexity of the process should not be underestimated. Certain certifications mandate evidence of not only your own company’s compliance, but also that of your suppliers. This necessitates maintaining awareness of your partners’ certificates and adapting to the evolving compliance requirements across your supply chain.
This fragmented process often requires multiple full-time employees just to:
- Monitor certificate expiration dates for both your company and your partners
- Navigate numerous supplier portals, each with distinct requirements
- Track, remind, and follow up with suppliers to ensure continuous validity of their certificates
What should be a straightforward task becomes a time and resource-consuming process.
The Industry Is Calling for Change
Suppliers across industries at different stages in the supply chain continue relying on existing and outdated certificate management systems, despite growing inefficiencies in these processes.
The majority of companies within the automotive supply chain are eagerly seeking opportunities to reduce costs and determined to reduce the effort related to non-value adding tasks, such as managing company certificates.
Tier 1 suppliers can benefit from a unified approach to simplify their certificate management, reducing the need to repeatedly submit certificates to multiple OEMs. More importantly, they seek visibility into the compliance status of their Tier 2 suppliers, as a single non-compliant partner can compromise their own compliance and put critical business relationships at risk. In response to these challenges, industry consortia and standards bodies—such as AIAG, VDA, and initiatives like Catena-X—are actively promoting harmonized, digital approaches to certificate and compliance data exchange across the supply chain. Their efforts aim to promote transparency, reduce redundancy, and enable a more scalable, future-ready model.
In essence, the fragmented methods of the past are outdated to the complexity and speed demanded by today’s global supply networks and companies and initiatives close to the automotive industry are calling for change.
sovity’s Take: It’s Time to Cut the Complexity
At sovity, we are convinced managing certificates – both your own and your partners’ – is essential, but the associated processes should be simplified.
In an interconnected supply chain, efficiency is everything.
We aim to help you focus on your core business by reducing the complexity of your daily business. Together we can transform certificate management into a streamlined process that can be scaled up as your business grows. This will eliminate repetitive effort, simplify compliance, and make the process much more efficient.
Stay tuned
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