10 million cars and a good night´s sleep 

Logistics has changed gears at GM. A new proactive approach helps eliminate waste by working closer cross functionally within GM and externally with suppliers. Last year, improvement proposals from Maersk Line helped GM cut cost, winning the carrier new business and the supplier of the year award.

Colombia Supply
GM produced and moved just shy of 10 million vehicles in 2015. This is equivalent to one car every three seconds. Every day, all year, across the globe.

Maersk Line and GM in brief

  • Maersk Line manages approximately 70,000 FFEs (forty-foot equivalent containers) for GM every year
  • The partnership between Maersk Line and GM dates back more than 15 years
  • On 13 March 2015, GM awarded Maersk Line with its 2014 Supplier of the Year award

GM produced and moved just shy of 10 million vehicles in 2015. This is equivalent to one car every three seconds. Every day, all year, across the globe. To make this production titan hum, parts, materials and vehicles must flow seamlessly across the organization’s global and constantly evolving footprint.

“This is the pulse of our organization, and things can go wrong if it does not work. A production plant can shut down without the right part. A dealer can lose a customer without the right car in stock,” says Edgard Pezzo, GM’s Executive Director of Global Logistics.

It is Pezzo’s responsibility that parts move from suppliers to production plants and vehicles to dealerships. And if that task by itself was not daunting enough, the 30-year veteran of GM was simultaneously challenged to implement a cost-optimizing program to ensure long-term cost savings when he took the job. Over the last two and a half years, Pezzo has moved logistics out of its traditional comfort zone and into the spot light.

Collaboration – inside out

"We have changed the way that we act with the other departments within GM. We now make sure that we actively participate in the decision-making processes. For example, we are now an integral part of how we develop our new manufacturing footprint. This way we can make sure that we collaborate and provide input such as supplier location, transportation cost, etc. so GM can make the right decision based on total enterprise cost – not just logistics cost," Edgar Pezzo says.

This approach also extends outside of the GM organisation:

“We have also changed the relationship with our suppliers so we work closer together,” Pezzo says. “One thing is how we view our internal systems and another is what external eyes can see. Listening to input from outside can be the best way to identify waste in the system and then you work collaboratively to eliminate it, reduce cost, making sure that both sides win.”

Pezzo points to GM’s production facility in Bogotá, Colombia as an example. Maersk Line recently began calling the port in Buenaventura with larger vessels, improving competitiveness. Pezzo calls this a “good business case” that GM and Maersk Line put together, working collaboratively.

A dealer can lose a customer without the right car in stock.

Pezzo

EDGARD PEZZO, GM’S EXECUTIVE DIRECTOR OF GLOBAL LOGISTICS

For Neil McGuire, who is Key Client Manager for Maersk Line’s Automotive vertical in North America, close collaboration is the key element that enables the carrier to keep adding value to the partnership.

“Our work with GM goes far beyond supply chain planning; it’s where senior leadership from both sides are involved and committed to partnership, down to the level where we know the GM business as well as they know it,” he says.

Making opportunities visible
According to Pezzo, the partnership could hold even more potential.

“I think it is going to be a very long partnership because we are putting things together with specific business cases,” he says. “Maersk Line continues to provide interesting proposals and process improvement ideas to us, so they were the supplier. We have a great relationship that includes great collaboration and both sides are winning. For GM: cost reduction, for Maersk Line: more business.”

Pezzo’s own thoughts about his responsibility, keeping the GM machine well-oiled and running smoothly –what keeps him awake at night?

“Of course we have situations where we are on the verge of not having the right part, at the right time at the right place, but because of companies like Maersk Line, I can sleep well. It is good to have partners like Maersk Line,” he says.