Industry Focus Automotive Supply Chain Gaining a competitive edge
The automotive industry is highly complex as finished products are the result of a structured manufacturing flow that involves multiple parties interacting in a global network. However, as Domenico Piantelli of Reply explains, the adoption of an integrated Transportation Management System (TMS) enables automotive manufacturers to insource the control of strategic business processes, thus enabling them to stay competitive
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utomotive firms have had to face several challenges in the past decades - namely innova- tion, differentiation, cost reduction and organisational dimen- sions. The business model evolved through the years from a ‘make’ to a ‘buy’ production strategy with the aim to deepen core technological competences and reinforce the rela- tionship with other suppliers through the value chain.
The result is a complex logistic network of partners that cooperate to provide and distribute a broad range of goods worldwide. Today, estab- lished global players are dealing with a scenario extended to the emerging countries, which represent important sales opportunities as well as threats, since the new competitors are filling their technological gap while gaining market shares by taking advantage of low production and logistics costs.
Transportation management flows A common element of all the major players in the automotive industry is the control of several brands or business units, which provide a wide range of product lines that often share the same components. If the organisation of the inbound flows is not centralised and the supply is managed through heteroge- neous agreements with different service providers and suppliers, all the benefits that could be achieved by exploiting the obvious synergies get lost.
This conclusion has brought the ten- dency to insource the control of the transportation flows, by creating a shared service centre for the integrated management of all inbound transports needed by the different business units. This service centre can be a newco owned by the automotive company itself, acting as the logistic headquar- ters for the whole network. The cen- tralisation of the competencies and the resources, together with a greater awareness and visibility of the trans- portation flows, can lead to the achievement of several efficiencies through economies of scale and scope. As the newco coordinates the entire network, it has to be equipped with an adequate TMS to support logistic practices and communica-
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tions along the supply chain. The start-up of the newco and the adoption of a TMS solution are proven factors for a winning strategy, as demonstrated by the example of some of the most important global automo- tive companies, which achieved the following results:
Above: Domenico Piantelli, senior partner, Reply
1. Process standardisation A centralised governance leads to a greater knowledge and normalisation of the processes, leveraging best practices, regulating rate structures and standard- ising master data. Further achievements can be reached by subsequent and pro- gressive automation of these processes.
2. Support to decision making TMSs support decision making through all the processes - orders belonging to different business units or companies can be managed from a single system, therefore costs are reduced by exploit- ing load consolidation opportunities and optimisation in the selection of the best carriers, rates and mode.
3. Greater integration
Data visibility and distribution can be greatly improved across all the parties involved in the transportation process. Manufacturing plants, suppliers and service providers can send and receive information by interacting with a single TMS solution. Transportation orders can be received from different legacy systems owned by the company and
normalised, whilst cooperation tools can help to standardise and manage the workflows for shipment tendering and execution. Settlement processes can be automated by auto-matching the invoices received from the service providers and identifying discrepan- cies against the original contract.
4. Rapid execution
All the players involved in the trans- portation flow can have access to accu- rate and near real time information about their shipments and orders, thus leading to a greater capability to react to sudden changes and take the right counter measures, such as switching to other transport solutions or activat- ing specific processes to manage the exceptions. Traceability of the goods shipped is just one of the several value added services that the automotive company can offer to its clients thanks to these functionalities.
5. Network improvement The supply chain can be continuously improved and optimised with business intelligence and historical data analysis, evaluation of the carriers with score- cards, and definition of different KPIs. Networks can be improved overall and new consolidation and routing opportu- nities can be discovered.
Reply
www.reply.eu T: 0207 730 6000
Enter 206 Getting to grips with tyre production
risplant, part of the BEUMER Group, has launched its first automated material handling system to be specifically customised for the tyre production industry. Ensuring gentle transport of uncured and cured tyres, the Crisplant Tire Tray Transportation and Sortation System automates manual handling and provides trace- ability and tracking of individual tyres through every stage of the production process. The automated system includes features such as fully automated loading and unloading, end to end tracking of tyres using RFID technology, and the ability to handle a variety of tyre sizes within the same system. Detailed management statistics, in addition to system wide visibility and control, also enable the system to be continually optimised to enhance process efficiency.
C
BEUMER Group
www.beumergroup.com T: +45 8741 4141
Enter 207 JUNE 2013 Automation
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