22 SCS:AUTOMOTIVE LOGISTICS
Toyota’s policy is to
manufacture cars within
the markets where they
are sold.
The true five-day
car is still
probably some
way off but there
is a definite move
to push subassembly
work
either further
back up the
chain to
suppliers or
downstream to
dealers or 3PLs.
make. Dyer continues: “In the past, most suppliers would
deliver components themselves, with the logistics cost
included as part of the component cost, but most
manufacturers now take responsibility for collection
themselves – it gives them greater control and visibility.” DHL
operates many of those manufacturers’ systems, “and what
we’re now seeing is a switch from dedicated collections to
collaboration, especially in Europe.”
There is also a growing desire among manufacturers to
look at their entire supply chain, including that for spares
and finished vehicles, “putting the different parts together
as we already do for Ford, Jaguar and Land Rover.” Some of
this is coupled with growing environmental awareness, he
adds. That might mean increasing the use of
environmentally-friendly modes of transport like rail but
also ensuring that trains and trucks run full both ways. DHL
is working on new designs of handling equipment that
might make this possible.
Another sector of the supply chain that could be ripe for
collaboration are deliveries of spares to service agents. “Again,
we’ve seen a real move in this area and we see ourselves as
creating an industry platform.” One factor that helps is that,
throughout Europe, car dealers and servicing garages tend to
congregate in the same part of town.
DHL also has some specialist services including Tyreteam –
the name mirrors DHL’s successful Tradeteam drinks delivery
operation – and it now delivers around 40,000 tyres a night.
Other areas ripe for such an approach include exhausts –
DHL handles 90 per cent of deliveries of replacement
exhausts in the UK – and replacement windscreens.
Another significant piece of work, this time specifically for
Volvo cars, is in moving from a spares delivery system based
on a single DC in the UK to a same day service based on six
local delivery centres, each within a two-hour delivery time of
all dealerships. On the face of it, this would increase spares
inventory levels slightly, but it makes for far happier
customers – no more 24-hour waits while a spare part is
delivered on the overnight service.
SEPTEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
Experience with other parts of the Volvo network in
Germany and Sweden has also shown that there are hidden
benefits in that dealership areas previously given over to
spare parts stores can be used to increase sales space or
servicing bays. It could also reduce the tendency for service
agents at the end of long supply lines to squirrel away spare
parts ‘just in case’ they are needed.
While this is very much a Volvo scheme at the moment,
other manufacturers are interested in the concept.
At Menlo Worldwide Logistics, Steve Dean – senior director
of global business development for the automotive industry –
says that there is now a definite trend towards 4PL among
major manufacturers and Tier 1 suppliers. While the concept
has been talked about for the past six or seven years, he says.
“We now have systems that have the ability to wire together
the various 3PL providers and provide one view.”
It’s likely to be a long process but many tenders are looking
for more comprehensive logistics management.
Recession
The recession has made car makers think hard about many
aspects of their business, not least how to shorten order-todelivery
cycles. The less time materials, components or
finished vehicles spend in the supply chain, the less
opportunity there is for demand forecasts to get out of kilter.
“I think also the approach has changed in that before, you
thought in terms of doing this project saves X per cent of your
cost, that one Y per cent, but now manufacturers are looking
at a much more collaborative approach in how they can
compress order-to-delivery times.”
The sudden surge and continued volatility of oil prices
have also had a profound effect on the US car market, more
so than in most other parts of the world. Smart cars are
becoming a common sight, unthinkable when gas was still
under $2 a gallon. Steve Russell, sales director at NYK
Logistics UK, which works for many of the world’s car
manufacturers – including prestigious marques or specialist
manufacturers like Aston Martin or JCB – says that he
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.