General Motors South Africa (GMSA) and integrated logistics provider UTi have won the Platinum Award at the annual Logistics Achiever Awards ceremony recently held in Johannesburg. The prize was awarded in recognition of their integrated supply chain joint venture Euro Express.
According to Evan Dold, GMSA vice president of global purchasing and supply chain, the focus of the initiative was to identify and create a solution to a fragmented European supply chain that was negatively impacting local production. “Before the implementation of this initiative GMSA constantly faced challenges of production down time due to delays in parts sourced from Europe,” he said.
Since the programme was introduced GMSA says it has not suffered any subsequent line stoppages involving the right-hand drive parts for the Opel Corsa Pick-up. GMSA sources its CKD pack from Brazil but all right-hand drive components are sourced from suppliers in Europe, Dold told Automotive Logistics.
Stock on hand was reduced by half – from 20 days to 10 days supply, damages were significantly reduced and container utilisation was optimised to 95% from 75%. “Over the last five years these improved efficiencies saved the company approximately R80m [$10.3m],” Dold said, with the benefits felt by both companies and GMSA’s parts and logistics suppliers.
To realise these savings the companies worked together to model a supplier network that established strategically placed consolidation centres at locations that minismised the transport distances between them and the suppliers. “There are three consol centres in Spain – in Madrid, Barcelona and Zaragoza – supporting the majority of volume, with a fourth in Mannheim, Germany supporting European suppliers based outside of Iberia,” said Dold. Safmarine ships the parts from Europe to South Africa.
Modular packaging was designed for parts that previously had high packaging costs, poor box density and poor container utilisation. “Unique packaging modular to a 40ft high cube container was designed to maximise container utilisation (improved from 75% to more than 95%) and reduce in-transit damages,” continued Dold. “Packaging specialists also ensured optimal packing densities within the boxes themselves, resulting in improvements of up to 100% in certain cases. The combination of the above improvements resulted in more than 35% reduction in ocean containers moving the same volume of parts.”
UTi source the boxes from a Spanish supplier on behalf of GMSA.
GMSA and UTi have had a long a fruitful relationship according to Dold. UTi currently performs warehousing and line supply functions for GMSA’s production, as well as daily milkrun collections from suppliers based in the major centres in South Africa, including Johannesburg, Cape Town, and Durban. “They deliver within 24 hours into our two plants, and they hold the national contract for distribution of our parts and accessories to 142 dealers across South Africa,” he said.
UTi does business with various GM units around the world, specifically with operations in Latin America and Europe.
Pictured (L-R) Back: Evan Dold (GMSA), Nabiel Conybeare (GMSA), Sean Bricknell (GMSA), Paul Marshall (UTi), Gavin Rimmer (UTi), Rick Dowie (GMSA); Front: Brad Kobus (UTi), Gordon Brink (UTi)
