In many sectors, logistics is being transformed by e-commerce, with brands connecting more to the mobile customer, who in turn demands order fulfilment as fast as you can swipe a screen. The effect this is having across the general logistics market is pretty staggering as companies compete to manage last mile deliveries to customers more effectively (and, even more challenging, profitably).
The automotive industry, too, will feel impacts, as mobile apps change the way many users interact with vehicles, whether through shared driving schemes or converting their own cars into taxis. Freight itself is in some cases also becoming an open, sharable commodity, where truck or ship space can be signalled and bought in real time the same way a passenger now books a passing taxi.
In some ways it might seem that these trends are passing by car-related purchases, and the mass production that accompanies them (both still growing in spite of the ‘sharing’ economy). Whether as a result of the dealership model, or the consumer’s desire to see and feel a car first, there are fewer means to buy online. Automotive supply chains, with lead times of 90 days or more, do not quite fit into the messy, real-time e-commerce economy, where customers are virtually everywhere at any time. The smartphone, attached to the individual, transmits changing behaviour and locations faster than bricks-and-mortar dealerships can, and certainly faster than plants produce the right inventory.
However, dealers and OEMs are exploring e-commerce, including for spare parts, used and (nearly) new vehicles. Just this past week, for example, Mazda revealed that it would sell the first 1,000 cars of a special launch edition of the Miata online. While such customers can only choose one type of vehicle, Porsche, meanwhile, has launched website options that allow customers to fully customise their models online.
In most cases these online transactions are replicated or fulfilled through more traditional dealer channels. And even where deliveries may be direct, we've found that transaction platforms have a ways to evolve. However, it is interesting to note that when it comes to delivery, shoppers make no distinction between OEMs, dealers or wholesalers, expecting unified, fast, service across all channels. Perhaps that is among the most important lessons that automotive can learn from e-commerce.
Few understand this expectation as well as Neil Swartz, head of Toyota’s North American Parts Operations, for whom the end customer, whether in person or virtual, should be the supply chain’s only focal point. That means getting parts to customers as quickly as they demand them. While Toyota’s parts distribution may not yet be within the ‘Internet of Things’, Swartz’s team is anticipating changing behaviours. Dealers can order and receive parts several times a day, in a matter of hours. The company is also experimenting with smartphone apps. The focus is on customer fulfillment to a larger extent than cost reduction.
This is still Toyota, where the Toyota Production System looms large. But Swartz wants to harness the efficiency of TPS, together with technology, to improve customer service, with logistics the competitive advantage that threads it all together. That way, the future won’t pass Toyota by.
