Global round up: Skoda expands; Gaz starts new LCV; Toyota links with JLR to identify risk; Daimler builds in Bremen; TNT sells China road operations; Toyota Awards; Dayaowan port to get auto hub

The 100,000-square metre spare parts distribution centre is equipped to handle around 25,000 aftermarket deliveries per day and distributes parts and accessories for Skoda, VW, Audi and Seat brands to more than a 100 countries in Europe. It is one of three European central warehouses supplying VW brands.

“We will have increased our range of parts and accessories by almost 50% to 214,000 items before 2018,” said Roman Havlásek, head of Skoda Genuine Parts and Accessories.

The company said the central warehouse has been doubled in size and features eleven aisles of 42-metre high racking systems that can store 30,000 pallets. Each of the aisles has its own automatic stacker crane, which can move more than 200 pallets an hour.

Parts deliveries are prepared and carried out around the clock with around 500 employees working in a three-shift pattern. Skoda uses its own employees to handle logistics, administration and systems at the centre, said a spokesperson for the carmaker.

“Inland shipments are always delivered by the next morning and European deliveries, outside of the Czech Republic, take a maximum of 24 hours,” said the company.

Transport is provided by a number of external logistics providers, which in the central European region include Autodoprava Tosovsky and Seco Group for the Czech Republic, and Araver Trencanské Teplice in Slovakia.

More than 1,000 suppliers ship their products to the centre, according to the Volkswagen Group.

Expanding Skoda’s home plant
Last week Skoda also began production of the Octavia Combi at its main plant in Mladá Boleslav, following investments to expand production capacity that have included a new press line as well as a new logistics warehouse.

“We are facing the third major start of production within a few months,” says Michael Oeljeklaus, the Skoda board member for production and logistics. “My compliments to the entire team working in production, planning, tool-making and logistics for rising to this challenge with great competence and passion,” adds Oeljeklaus.

The capacity of the assembly line has been increased to produce 800 to 1,200 vehicles per day, including Octavia/Octavia Combi and Rapid.

Gaz adds new LCV to Gorky output
This week saw the start of serial production of Gaz’s latest light commercial vehicle (LCV) – the GAZelle Next – at the Russian vehicle maker’s Gorky Automobile Plant in Nizhny Novgorod. As well as upgrading its production facilities, GAZ has introduced a more global supply chain for the model, including the use of a number of global tier one suppliers

Gaz is the market leader in Russia’s LCV segment, with a market share of around 50%. The launch was attended by the Russian Federation’s prime minister Dmitry Medvedev and Gaz president Bo Andersson.

Gaz invested in new stamping and welding lines for the model, modernised its paint shop and added further quality control stations. But there have also been changes to the OEM’s supply chain, as it shifted to more global tier suppliers and global sourcing in some cases. According to the company, GAZelle Next is built using parts and components from suppliers such as Cummins diesel engines, ZF steering, Mando shock absorbers, Anvis silent blocks, braking system elements form Bosch and Mando, CSA Castellon adjustable steering column, Sachs clutch, Takata safety belts, Delphi HVAC and driving seat from Isringhausen.

During an interview with Automotive Logistics last month, Bo Andersson said Russia’s recent accession to the WTO has led partly to increased levels of global sourcing for Gaz. Upon joining the organisation, duties were eliminated on a range of parts, including plastic body panels, door handles, wire harnesses, glass and wipers. “This has stimulated our purchasing people to focus more on global sourcing,” he said. “It does not mean that we give up on our Russian supply base, but we have to make sure we’re competitive on a landed basis.”

Gaz is also ramping up contract manufacturing of vehicles this year in Nizhny Novgorod for the Volkswagen Group, General Motors and Daimler. Read more about Gaz’s logistics and purchasing strategy in the April-June edition of Automotive Logistics magazine.

Toyota partners with JLR, Aston Martin and others to reduce supply chain risk
Several major carmakers in Europe have released details of a shared online platform aimed at identifying risk in their supply chains. The companies have outlined three tools to anticipate and respond to supply chain problems, including an online supplier portal, supply chain mapping and a financial health check for suppliers.

The consortium of carmakers, which includes Toyota Motor Europe, Jaguar Land Rover and Aston Martin, has developed this shared system together with supply chain management company Achilles, and Lord March, the owner of Goodwood, a UK-based automotive event organiser.

A release issued by Achilles outlined a three-step solutions to managing potential risk in the supply chain, which the group of companies said they hoped would be adopted across the entire automotive industry.

One part of the solution is an online portal, accessible to buyers and suppliers, which stores up-to-date information across the supply chain. All suppliers of the three OEMs will fill in a standardised questionnaire designed to identify risks in terms of health and safety, compliance, financial stability, ethics and corporate social responsibility. This will allow buyers to see issues in the supply chain “at a glance”.

A second tool, led by Toyota Motor Europe, is a supply chain mapping (SCM) approach that allows OEMs to see information about the sub supply chain with critical aspects of car production. As well as allowing OEMs to assess if suppliers are exposed to certain risks, the tool will also address potential bottlenecks related in part to logistics, including identifying reliance on single suppliers and those suppliers with long lead times that could impact production.

The final tool is a financial analysis model that is designed to identify potential financial risks at a supplier.

The project has grown out of the manufacturers’ acknowledgement of the severe risks to production that can result from having poor visibility over today’s highly integrated and global supply chain. Guillaume Jacques, purchasing general manager for projects and strategy planning at Toyota Motor Europe pointed to recent natural disasters and accidents as the impetus for the project.

“Recent events, such as the Japan earthquake, Thailand flood, and smaller scale issues such as fires at supplier premises showed us that we needed to address potential supply risks deep in our supply chain and had to extend risk management from tier one level to lower tiers.”

Ian Harnett, purchasing director, Jaguar Land Rover, said: “Achilles Automotive will deliver greater efficiency not only to JLR but to the whole automotive industry through the creation of a standard process of managing supplier information and keeping information current and up-to-date.”

“This technology will enable OEMs to map and understand their own supply chains right through the many tiers,” said Luis Olivié, global business development director at Achilles. “It will allow them to see the interaction and dynamics of them and risk assess in a way that has never been done before. It works not only up and down in their own supply chains, but across different companies to maximise benefits.”

According to Toyota, the carmaker originally attempted to develop a supply chain mapping solution on its own, but found that the inter-dependence of the automotive supply chain is too strong for any one carmaker to securing it on its own.  

“We first tried by ourselves but faced difficulties due to the complexity of the project and workload both on supplier and TME side,” he said. “Achilles approached us with the concept of an automotive community at the beginning of 2012. We quickly realised the potential benefits of a community approach and proposed to Achilles to extend the scope of their project to include supply chain mapping.”

Goodman builds second warehouse for Mercedes
Facility developer Goodman is building a new logistics centre for Daimler in Bremen, Germany that will be used for production supply to the nearby Mercedes-Benz plant.

The 33,000-square-metre facility, called Goodman Interlink Bremen, will be used for storing pressed parts such as wings and bonnets for the C-Class and other models made at the plant.

It will be located near the company’s existing 46,000-square-metre warehouse and is close to the A1 motorway and inland waterways via Fuldahafen.

TNT Express sells Chinese operations
TNT Express has announced the sale of its domestic road operations, Hoau, to private equity funds managed by CITIC Private Equity. The sales follows TNT’s announcement that it would restructure its business to improve profit, including selling off domestic operations in both China and Brazil.

The transaction, for an undisclosed amount, is expected to clear in 2014.

Hoau is a road distribution service provider in China that specialises in day-definite services. The company operates around 1,500 depots in more than 600 cities in China.

The sale is part of TNT Express’s attempts to restore profitability following UPS withdrawing its proposed purchase of the company earlier this year. UPS cancelled its offer after the European Commission prohibited the takeover on the basis of limited competition in the express delivery market.

Along with the China operations, TNT has said that it would sell its loss-making Brazilian operations, which were the product of earlier acquisitions of express and road logistics companies in the country.

TNT Express has said that it would focus its business around express deliveries within Europe and between Europe and other continents. Around 4,000 jobs are expected to be shed at the company in the next three years.

UPS launched an appeal to the EC’s decision this week to the European Count of Justice. The company said in a statement that the appeal was intended to clarify the rule and “to get a more precise evaluation of the competition in the European market and to ensure no precedent has been set that could limit the chance of international growth”.

TNT Express released a statement acknowledging the appeal, but said that it did not imply a renewal or reconsideration of the previously proposed UPS offer. Rather, TNT said that it would continue to focus on its profit improvement plan.

TNT Express has also confirmed that Tex Gunning will be the company’s CEO from the beginning of June 2013. The confirmation follows the announcement made in February, which was subject to shareholder approval (read more here).

Toyota awards logistics partners
Toyota Logistics Services (TLS) gave 16 of its logistics providers awards recognising their service over the past year at a Partners Meeting held in Newport Beach, California during March.

The event included a business meeting led by Nancy Davies, TLS vice president, and guest speaker Bob Carter, Toyota Motor Sales’ senior vice president of automotive operations. Lee Hobgood, TLS corporate manager of supply chain administration, presented the awards following the meeting.

The Logistics Partner Awards are separated into four categories, with various transport modes eligible for each one.

The Outstanding Achievement award recognises those companies that have demonstrated a significant level of resourcefulness and responsiveness to service Toyota’s business needs. K-Line America received the award in the import marine mode category, while NYK Line received one for export marine services.

The On-Time Performance and Quality awards are offered for the highest performance score in each of these categories, with quality defined by lowest freight damages. K-Line again received a Quality award in the import marine category, with Crowley Liner Services taking one for export marine for its transport of more than 13,000 vehicles to Puerto Rico in 2012. Quality awards also went to Canadian Pacific Railway and Professional Auto Transport in the rail and highway transport modes respectively.

On-Time Performance awards went to Union Pacific Railroad and highway carrier Centurion Auto Transport.

Toyota’s Customer Service Excellence award recognises carriers who have shown the greatest commitment to going “over and above everyday expectation”. Recipients of this award included NYK Line, Centurion Auto Transport, Matson Navigation Company (for export marine) and Union Pacific Railroad.

TLS also gives a President’s Award for each transport mode for companies that have achieved the highest combined score for the other categories in their respective mode. Centurion Auto Transport, K-Line America, NYK Line and Union Pacific Railroad each received the award.

Joint venture to develop auto hub at Dayaowan port
In China, Dalian Port Group, Dalian Free Trade Zone and Anji Automotive Logistics have signed a cooperative agreement this week to develop an automotive logistics terminal on the north side of Dayaowan port area in Liaoning province. It is designed to operate as a logistics hub for complete vehicle and vehicle parts in Northeast Asia.

According to the agreement, Dalian Port Group and Anji Automotive Logistics will work together on automotive shipping, warehousing and trading by establishing a 50/50 joint venture Dalian Haijia Automotive Terminal, while Dalian Free Trade Zone will provide the relevant policy support.