Process Modeling in the selected supply chains

As described in Chapter 2.7.1., SCOR model will be used for the process modeling.

In the Automotive industry, majority of parts and components is engineered to final customer’s requirements. Therefore, we speak about engineered to order products.

Automotive supply chain covers all processes from supplier’s supplier to customer’s customer. This work focuses on the logistic part of the supply chain - inbound and outbound logistics (deliveries). Therefore, sourcing, manufacturing and returning activities will not be in scope of this work as they are not as packaging related as deliveries.

5.4.1. Standard processes

Standard processes will be based on the selected supply chain and the logistic flow.

From the SCOR standard management processes (Plan, Source, Make, Deliver and Return), both selected flows are a Deliver (D) process. It is obvious, that a supply chain is usually described by all 5 management processes. However, for the logistic costs analysis, mainly the Deliver process is relevant.

Direct Full Load Delivery is a “push-principle” logistic flow based on forecasting, planning and call-offs. The analysis of standard processes in “Deliver” will start in the moment once the product to be delivered was produced based on customer’s call-off. As we know, in this logistic flow no warehouse for ready products is used and all products are based on customer demands. Therefore, the production process starts after receiving the final customer order/call-off for a specific quantity to be delivered in a specific time to a specific location. In this case, the “Deliver”

process starts immediately where a “Make” process was completed. Before the physical transport a short time buffer stock is usually used to bridge the time between the packing and the truck loading. The analysis will be done with the assumption that the supplier is responsible for the fulfillment of the order including the transportation (DAP-Incoterms 2010). This approach will enable to calculate the costs of the whole logistic flow as of one process.

The standard processes of Direct Full Load Deliveries (DFLD) are shown in the Figure 30. Process D4.4.3 is carried out by the transportation company (logistic service provider) and processes D4.4.4 till D4.4.6 are carried out by the customer (within the analyzed logistic process).

Intercontinental Multiple Warehouse Deliveries are deliveries of products over large distances passing through two or more warehouses. This is typical in today’s global sourcing activities in the Automotive Industry. Similar to the logistic flow described previously, also here different delivery conditions based on Incoterms can be used between supplier and customer. For the purpose of this work, we will assume that the supplier again is fully responsible for the whole shipment to the final customer (again DAP condition). As shown in Case studies in Chapter 6, such a condition (DAP) is often used in real supply chains. From the production point of

view, packing will be done at the end of the assembly line, what is a standard process in the industry. In this case however, the first warehouse switched into this logistic flow is inside the supplier’s facility. The main purpose is to bridge the time between start of manufacturing until the loading of the shipment. This can go over several days or weeks until the ordered quantity and a full cargo load (trailer or container) of products was produced.

Figure 30 – Standard processes for the analysis of DFLD logistic flow

Another warehouse considered for the analysis of this logistic flow is in the POL (Port of Loading). Here the shipment usually is waiting for loading documents and for final loading and shipping. After unloading in the POD (Port of Delivery), the shipment usually goes to a logistic service provider’s warehouse or own warehouse of the customer. This warehouse again is used to bridge the time between the reception of the shipment until the final consumption (usage). Additional costs and

Area Level - 1 Level - 2 Level - 3 Level - 4

Type Category Element Activities

Manufacturing M - Make M3 - Engineer-to-order product

M3.n - Pack ready products

M3.n.1 - Order packaging from warehouse M3.n.2 - Receive packaging at production line M3.n.3 - Prepare packaging for packing

M3.n.4 - Pack products acc.to packing specification M3.n.5 - Close packaging

M3.n.6 - Call for packed products pick-up

Delivery D - Deliver D4 - Deliver Engineered-to-order product D4.1 - Buffer ready products

D4.1.1 - Move packed products to buffer stock D4.1.2 - Book packed products to buffer stock D4.1.3 - Put packed products to buffer stock location D4.1.4 - Store ready products in buffer stock

D4.2 - Schedule delivery

D4.2.1 - Receive shipping note from customer D4.2.2 - Order transportation

D4.2.3 - Receiver transport confirmation D4.2.4 - Confirm delivery date to customer

D4.3 - Prepare delivery

D4.3.1 - Book customer order

D4.3.2 - Transfer products to shipping area D4.3.3 - Prepare delivery documents D4.3.4 - Label shipment

D4.4 - Transport

D4.4.1 - Load products according to loading scheme D4.4.2 - Issue loading documents

D4.4.3 - Transport products to customer D4.4.4 - Unload products at customer D4.4.5 - Inspect and verify delivery D4.4.6 - Send confirmation to supplier

D4.4.7 - Receive customer confirmation on reception D4.4.8 - Issue invoice

Direct Full Load Delivery - Standard processes based on SCOR

charges have therefore be calculated for the processed in the place of delivery (DAP condition). Usually the whole transport from the supplier until the final destination indicated by the customer is in forwarding company’s responsibility (logistic service provider).

The standard processes of IMWD are shown in the Figure 31. Processes from D4.4.3 till D4.4.13 are carried out by the forwarder (logistic service provider) and processes from D4.4.14 till D4.4.16 are carried out by the customer (within the analyzed logistic process).

Figure 31 – Standard processes for the analysis of IMWD logistic flow

Area Level - 1 Level - 2 Level - 3 Level - 4 Type Category Element Activities

Manufacturing M - Make M3 - Engineer-to-order product M3.n - Pack ready products

M3.n.1 - Order packaging from warehouse M3.n.2 - Receive packaging at production line M3.n.3 - Prepare packaging for packing

M3.n.4 - Pack products according to packing specification M3.n.5 - Close packaging

M3.n.6 - Call for packed products pick-up Delivery D - Deliver D4 - Deliver Engineered-to-order product

D4.1 - Store ready products

D4.1.1 - Move packed products to outbound warehouse D4.1.2 - Book packed products to warehouse system D4.1.3 - Place packed products to warehouse location D4.1.4 - Store packed products in the warehouse D4.2 - Schedule delivery

D4.2.1 - Receive shipping note from customer D4.2.2 - Order transportation at forwarder D4.2.3 - Receiver transport confirmation D4.2.4 - Confirm delivery date to customer D4.3 - Prepare delivery

D4.3.1 - Book customer order

D4.3.2 - Transfer products from warehouse to shipping area D4.3.3 - Prepare delivery documents

D4.3.4 - Label shipment D4.4 - Transport

D4.4.1 - Load products according to loading scheme D4.4.2 - Issue loading documents

D4.4.3 - Transport shipment to Port of Loading (Nr.1 secondary stream) D4.4.4 - Unload shipment and put into transit warehouse

D4.4.5 - Make customs clearance and issue shipping documents D4.4.6 - Load shipment on vessel (container ship)

D4.4.7 - Transport shipment to Port of Delivery (main stream) D4.4.8 - Unload shipment from vessel and load onto a truck

D4.4.9 - Transport shipment to customer's warehouse (Nr.2 secondary stream) D4.4.10 - Unload shipment from truck

D4.4.11 - Move shipment to (customs) warehouse D4.4.12 - Make final destination customs clearance D4.4.13 - Move products to customer's warehouse D4.4.14 - Unload and Validate products D4.4.15 - Inspect delivery

D4.4.16 - Send confirmation to supplier

D4.4.17 - Receive customer confirmation on reception D4.4.18 - Issue invoice

International Multiple Warehouse Deliveries - Standard processes based on SCOR

5.4.2. Process models

Process modeling of the two selected logistic flows will also be based on SCOR.

SCOR recognizes 4 different types of models (see Chapter 2.7.2). For modeling on Level 3 and beyond, the Workflow model was used. Figure 32 is showing the process model of DFLD based on the standard processes defined in the previous section.

Figure 32 – Direct Full Load Deliveries SCOR Process Model

Figure 33 is showing the process model of IMWD based on the standard processes defined in the previous section.

We can see from these process models, that intercontinental logistic flows are much more process intensive. Therefore, from cost point of view, standardization of processes in multimodal logistic flows is very important requiring efficient packaging solutions.