In- & Outbound Auto Logistics - Current & Future State. Matthias Holweg Geoff Williams

In & Outbound Auto Logistics

-Current & Future State

Matthias Holweg Geoff Williams

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Outline

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– Different levels of integration – Key performance indicators

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– What are the key constraints?

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– Key performance indicators

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June Conference 2000

Auto Inbound Logistics

Plant RDC Supplier Supplier Supplier Overseas Parts Load Efficiency, Frequency Collection Frequency, Inventory, Load Efficiency

How long does the system need to respond to change?

Non-Integrated Semi-Integrated Fully Integrated Call off Notice given 5pm, day before pick-up 2 weeks Hours, On-line Response Lead Time Call-offs

1 day 2 weeks < 1 day

Response Lead Time -Framework

1 day? 2 weeks 1 month

Trailer-Truck Ratio 3:1 2:1 2:1 Delivery Lead Time Call-off - Plant 36 hours 12-18 hours av. 24 hours max 16 hours, 0.7 days stock (incl. WIP)

Non-Integrated Semi-Integrated Fully Integrated Load Efficiency (Trunking) 85% cubic 85% floorspace 68% cubic 80-85% cubic Cardboard Content 50% 25%, plus 5% due to lack of empty stillages N/a (est. 10%) No of Container Sizes Std / Non-Std 277 containers, 10% standard N/a 120 containers, 60% standard Inbound Key Performance Indicators II

Inbound Logistics Process - Example

Mon Tue Fri Mon Mon

Week 1 Week 2 Week 3

Fri Fri Release of orders Route Generation …. Feedback to Plant to achieve load efficiency. Pick-up Sheets are received at vendors & carriers Start split into delivery routes for W3 PUS received at depots, some via courier UK Start Collection Consolidation in Europe Delivery to Plant UK: Collection Generally day before delivery Start Delivery to Plants Last Deliveries to Plants

CROSSDOCK COLLECTION ROUTE SUPPLIERS PARTS DELIVERIES VM LINEHAUL ROUTE JIT COLLECTION DETAILS APPLIED TO SCANNING EQUIPMENT SCAN PRODUCT AT THE POINT OF COLLECTION VARIANCES COMMUNICATED TO CONTROLLER ASN Host RAN’s

CROSS DOCK DATA

12 8 6 4 3 2 1.66 0.97 _{0.9 0.79 0.75 0.72 0.7} 0 2 4 6 8 10 12 86 87 88 89 90 91 92 93 94 95 96 97 98

Days _{Total Quality}

Benefit

Actual Financial Benefits

Note:- Figures shown also include work in progress (W.I.P.)

Progress to Date Optimum Inventory

Scenario

1 2 3 4

Safety Stock at Timeslot

Deliveries from Partner

Sto ck Level s ( H rs)

Integrated Logistics

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June Conference 2000

Problems in Current State

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– Short term changes occur due to: • Call-off change by VM

• Lack of empty stillages

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– Lack of standardisation, loss of efficiency (stacking) – High cardboard content

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– 60-70% shut on Friday afternoon

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3DayCar Requirements I

24 hour Delivery and Pick-up

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Overlap of UK Suppliers

VM A

VM C

VM B

7%

16%

27%

4%

14%

21%

11%

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3DayCar Requirements II

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June Conference 2000

3DayCar Requirements III

Modular Load-Building Ability

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– Minimum individual containers and cardboard

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Outbound

Logistics

Auto Outbound Logistics

Load Building _Backload Load &

Outbound A Outbound B Outbound C Load Consolidation in Plant 0.9 days on average Factory-Compound Actual Delivery Time

5 min 1-12 hours N/a

Compound-Dealer Contracted Delivery Time [days] 2.75 2.75 2.67 Compound-Dealer Actual Delivery Time [days] 1.94 2.4 2.0 % outside contracted Delivery Time 8.5% 3.6% 1.5% Dealer Drops _{2.63 3.5 3} Damage Level 0.6% 0.4% 0.8%

Outbound A Outbound B Outbound C Data Provided Monthly + Weekly f/c Daily call-off Monthly + Daily (f/c) Hourly call-off Monthly + Weekly f/c Daily call-off

Total Volume Monthly Weekly

Monthly

Weekly

Volume per Model / Body

Monthly Weekly

Daily

Weekly

Volume by Market Monthly Monthly

Weekly

Market by Region Monthly

Daily Weekly Feedback Given Delivery Vehicle Status Volume Delivery Vehicle Status Volume Delivery Vehicle Status Insufficient Planning Data Insufficient Planning Data

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Forecast v Actual Volumes

0 500 1000 1500 2000 2500 3000 3500 Jan-99 Feb-99 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 Plant 1 - F/C Plant 1 - Actual Plant 2 - F/C Plant 2 - Actual

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June Conference 2000

Forecast Error range from +60% to -100%

Forecast Error in % -120% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% Plant 1 - Variability Plant 2 - Variability

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Main Issues

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– No collaborative planning other than load-building

– No input into production scheduling

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– ...but no formal process

– Contributes to 3 days load building time

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The Future State of

Outbound Logistics

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Problem

How to deliver vehicles

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In 1 day within the UK

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At the same cost as the current

3 - 4 day situation

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Without significant environmental

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Assumptions

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+ 0.5 million road-trunked exports

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June Conference 2000

Cost and distance situation

Cost p.a. Truck

Distance p.a. Current £150 million 125 million

kilometres 3DayCar with current methods £ 200 million 160 million Increase 33% 29%

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Cost situation

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0.6% of retail price of vehicle

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Solutions

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logistics companies

– Multi Franchise – Backloading

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Multi - Franchise History

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Transporters identified by franchise Very little backloading opportunity

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Multi- franchise in remote areas. i.e. North of Scotland.

GEOFF WILLIAMS Group

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June Conference 2000

Multi - Franchise History

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one port

Logistics company co-operation to maximise backloading

opportunity ( now c. 60 % )

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manufacturers to work together to increase cost and distance

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Multi - Franchise

From Port

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Multi - Franchise

From Factories

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Multi - Franchise

Problem of Dogleg

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Multi - Franchise

Regional Compounds

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Backloading

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June Conference 2000

Cost Savings per unit :

Co-operation

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Savings

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Total Savings >£8

Additional Savings required <£12

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June Conference 2000

Mix of Lower Capacity

Transporters

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– Axle weight

– Fuel consumption – Emissions

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Cost Savings

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Savings

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BUT Combined saving only £14

More co-operation =

Less need to use smaller transporters

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Planned Logistics

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scheduling of long distance zone

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Planned Logistics

Open to All Parties : Current

MANUFACTURER LOGISTICS COMPANY DEALER ZZZZZZ ... WHERE’S THISCAR ??? RED CARS TODAY SORRY, SIR COMPONENT SUPPLIER

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Planned Logistics

Open to All Parties - Future

MANUFACTURER LOGISTICS COMPANY DEALER IT WILL BE HERE IN THREE DAYS, SIR I WILL HAVE IT IN TWO DAYS IT’S JUST BENG PAINTED COMPONENT SUPPLIER

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Feasible Solution

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Cost Savings

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Savings

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Combined saving £21

Savings £1

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Solution Effects

Transportation Cost Saving £1

Deletion of Distribution Centre £20

Minimum Saving Potential £21

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June Conference 2000

Cost and Environment conflict:

Example

L ow c os t v e rs us be s t e nv ironm e ntal option

70 80 90 100 110 120

C urrent low cost 3D C low km 3D C

Nu m b e r o f k m s p e r c a r

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Impact on Fuel less than

Kilometres - Regional Example

Difference in kilom etre and fuel im pacts

100% 105% 110%

S S cot Y orks N E ast

R egions Pe rc e n tag e i n c rea se K m increase F uel increase

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Other Areas of Efficiency Gain

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3 day - Demonstrator

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24 Hour Delivery to Dealer

Problems

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24 Hour Delivery to Dealer

Solution

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within 24 hours

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June Conference 2000

24 Hour Delivery to Dealer

Advantages

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Improves capacity utilisation

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Conclusions

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parties

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multi-franchise basis with logistics comps.

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