Globally, the automotive sector is thriving. According to market data provider, Statista, international automotive sales are expected to have grown by almost 10m units between 2012 and 2015. Consumer demand for cars is growing and the challenge for manufacturers is, quite simply, to increase production while maintaining quality.
However, with an increasingly global network and more complex supply chains often stretching across continents, OEMs are presented with challenges. Logistics operations are key to the success of an efficient production process and, as a result, many manufacturers are choosing to partner with specialist third party logistics providers to enhance operations and increase efficiencies.
Prior to the financial crisis and subsequent years of global recession, automotive manufacturing was a more simple and localised process. Yet, as manufacturers were forced to deliver efficiencies in a difficult economic climate, processes began to change and, increasingly, several models of car are run on the same production line. While this method of assembly improves production efficiencies it creates new challenges of feeding more and varied parts into the assembly line. This paved the way for a new approach to ‘inbound to manufacturing’ or I2M.
Under the new discipline of I2M, parts are tightly sequenced and co-ordinated while still enabling a level of flexibility within the production line. Many 3PLs are recommending that manufacturers establish an off-site sequencing centre from which inventory can be carefully managed and parts can be transported to the assembly line as necessary. At one DHL sequencing centre in the UK, we receive early visibility of the orders that are anticipated, which allows us to then manage parts and access the items that need to be transported to the assembly line.
It is not just parts that must be transported across the country and even the world, it is equally critical that the shipping of finished vehicles across geographies runs quickly and smoothly. DHL Supply Chain’s specialist automotive sales and marketing services business, Inside Track, was recently awarded a contract to manage Jaguar Land Rover’s special finished vehicles around the world. As part of the service, an industry leading IT platform has been established to track the status of vehicles. As with the assembly of vehicles – where it is crucial that parts are in the correct place at the correct time – it is equally important to move finished vehicles quickly, with total supply chain visibility, to have an accurate forecast of when an order will be fulfilled.
From parts to production and finished vehicle to car showroom, it is key that automotive manufacturers have a clear view of their supply chain. Partnering with a 3PL who can offer a lean, efficient and flexible logistics operation will enhance the service customers receive and ensure that the growing global demand for vehicles is met.
Bill Bacon is managing director, Automotive at DHL Supply Chain