Maersk EV Battery Flex Flow enables an industry leader to improve their storage capacities, safety compliance and overall costs.
The customer
Our customer is a first-tier battery supplier for the automotive industry and the largest electronic vehicle (EV) battery producer based in China. Some of its partners include automotive companies like Volvo, BMW and Tesla. The company is also a global leader of innovative technologies, committed to providing premier solutions and services for new energy applications worldwide.
The challenge
The market for battery cells is expected to grow exponentially this decade. Experts forecast the demand to increase by more than 20% a year until 2030. Moreover, batteries are classified as dangerous goods falling under the purview of strict regulations and checks. *
These factors have led to a spike in the demand for storage facilities that not only offer flexibility to move goods faster, but also meet compliance mandates. Most battery suppliers, including our customer, were also contractually obliged to keep a buffer stock close to assembly sites.
Our customer were looking at quite a few challenges. These included:
Fluctuating regulations and higher costs
The conditions to invest in extra storage space were not ideal, with a lot of ambiguity around regulations and safety requirements. The uncertainty increased costs and lead times for required green or brownfield projects, explained Ernst Martens, Dangerous Goods Commercial Manager for Europe and Africa at Maersk.
Shortage of compliant facilities
The automotive companies determined the location of the battery warehouses. This resulted in a shortage of compliant storage facilities to handle batteries within the given distance. It further jeopardised just-in-time (JIT) or just-in-sequence (JIS) deliveries. According to the customer, solving the warehouse and location challenges were critical to support their growth ambitions.
*Source: McKinsey & Company, Jan 2022
The solution
Through a strong understanding of automotive supply chains and internal cross-functional collaboration, our teams were able to offer a solution: the EV Battery Flex Flow . It was tailor-made for battery logistics and provided resilience in the supply chain through a strong alignment with demand patterns.
The EV Battery Flex Flow was also designed for an end to end integration of our transportation, customs and storage services. Here’s what we offered as part of Flex Flow:
Optimised storage and flexibility
We allocated space to temporarily store EV batteries using Maersk cold storage containers at ports, inland terminals or depots. The move allowed our customer to optimise their existing facilities and provided the flexibility of added storage space and quicker deliveries.
End to end visibility
The solution provided end-to-end control of the flow of goods through collaboration tools, activity tracking and process validation. The entire supply chain was visible which made it less prone to human errors.
Cost control
The solution also reduced the need for investments into new storage units, while still making it possible to support a lean manufacturing process and the JIT/JIS practices of EV assembly sites.
The customer now had a reliable and flexible solution which consistently allowed for sufficient stock levels at the right time and location, safeguarding on-time and in-full deliveries.
The result
The EV Battery Flex Flow was able to increase the customer’s storage capacity by 50%, increasing reliability. As a direct result of our solution, the customer was able to reduce overall costs by 30%.
The solution also underlined our commitment to providing agile and innovative tailor-made solutions to our customers along with our growing importance as a supply chain consultant.
The EV Battery Flex-Flow solution is the result of strong collaboration across our company. We believe the solution has enormous potential and can be rolled out to other customers. If you’d like to learn more about Flex Flow and our integrated logistics solutions, get in touch with your Maersk sales representative, or reach out to us directly at APACmarketing@maersk.com.
Amidst dynamic conditions, a leading EV battery supplier was looking for an agile and reliable supply chain solution. Maersk is excited to be the first mover, providing a tailormade, end-to-end supply chain solution for the EV battery industry with our Flex Flow service.
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