Cut costs by minimising lead-time across your automotive supply chain.
The 2 key factors which move the automotive industry forward are time and money. While these are independent values that define the success of the automotive business, they are highly interdependent and indivisible in nature. That’s because more than 40,000 parts come together from different corners of the world to take the form of 1 product: the automobile. A slight delay - even of a single component - can send the assembly line to a screeching halt, setting back your production and distribution workflows considerably, which will then spike your overheads through the roof. Given how fragmented the auto industry is today, the risk of delays due to buffers in silos is extremely high. That’s why, you need a logistics solution that gives you utmost visibility and control of your end-to-end automotive supply chain.
To ensure that the manufacturing costs are in check, it’s best the automotive industry abides by two principles: Just-in-time and just-in-sequence. Although it may be challenging to bring them into practice, when applied, the automotive supply chain efficiency can be significantly improved. Just-in-time refers to the time when the components must hit the production line – just exactly when it is their turn to.
Just-in-sequence, as the name suggests, is the sequential order in which all the components arrive from multiple sourcing point at the destination – which is usually the manufacturing unit. It is when suppliers ensure that both these virtues are in sync with each other that they can experience a happy flow of the supply chain - in terms of cost, time, and customer loyalty.
The advent of geo-political unrest and the global pandemic extending their reach across the world is derailing market equilibriums across industries. The automotive sector is no exception to those repercussions. As less as a 30-day disruption can cause supply chain vulnerabilities of 3-5% margin gaps. And an estimated $1 trillion in trade flows in the industrial section could be rebalanced, with a few new countries turning into major hubs of relocated production.
All of this means that automotive supply chains must now, more than ever, reflect values such as visibility, control, cost-efficiency, and timeliness. At Maersk, our integrated automotive logistics solutions are designed to give you all of that from departure to destination. All so that you experience a happy flow of supply chain, no matter the disruptions.
At Maersk, one of the ways we help you cut costs is by integrating your inbound and outbound logistics processes. By doing that - either by connecting them through a shared IT infrastructure, or by giving them a closer organisational relationship made possible by our automotive logistics experts - we ensure that all the delays that invariably come with working on silos are mitigated to a significant extent. This helps us minimise your costs – be it labour, production or overheads.
As a component manufacturer or supplier, your left hand must have the power to know what your right hand is doing at all times. Rather than, say, finding out at the last minute that you can’t complete production because a part earmarked for a production flow was damaged in transit; you can identify that possibility far in advance with greater ease.
Time is indeed money, especially so in the automotive sector. We minimise lead-time by expediting key decision making via integrating fragmented sourcing, manufacturing and distribution functions. But apart from that, we carefully monitor unnecessary expediting costs by figuring out where exactly logistics acceleration such as airfreight has taken place in the logistics journey. Our experts are trained to understand the impact of incidents and how it has caused delays and consequent surge in costs across your end-to-end supply chain.
This gives us access to the critical path, which leads us to find out more about transit time, logistics resilience, ideal transport modes, the point of entry, and even inventory worth - which will help us slow down or speed up the supply chain depending on the cargo value. All so that your sourcing, warehousing, and production costs are significantly reduced.
It’s vital for every participant involved in the automotive supply chain to be able to see the bigger picture. This not just gives you more visibility into your supply chain, but also helps you expedite decision making on-the-go and take actions in a preemptive way. This sense of control not just enhances customer loyalty, but also drastically reduces penalties owing to delays. A 360-degree view of your end-to-end logistics is imperative to ensure that your components flow seamlessly like clockwork from start to end.
At Maersk, we’re going all the way to give you an integrated supply chain offering. For example, the all-new 4PL solution that we built in partnership with E2open, a supply chain provider, is designed to transform raw information across the supply chain into actionable insights for agile decision making. This means that even if logistical disruptions were to arise, we can device alternative intermodal options such as rail or air freight to build more resilience. To ensure that your components reach your world markets just-in-time and just as planned.