Supply Chain country recently sat down with Automotive Logistics Group Publisher, Louis Yiakoumi, in regards to the hot topics within business. Simply I of your blog, Mr. Yiakoumi talked about the most important business difficulties. To some extent II he can cover what automotive companies do to overcome those difficulties.
SCN: what exactly are organizations doing to conquer the important thing difficulties dealing with the automotive business?
Yiakoumi: Carmakers are beginning to consider complete prices. Before, they may say to buying, “You dudes have inked an excellent task; you’ve reduced your expenses by a million bucks because you’re buying everything from Asia. Nevertheless logistics dudes, you’re performing a terrible job because your logistics prices went up by half a million bucks.” Therefore the logistics dudes will say, “Yeah, but you’re buying anything from Asia, and so the logistics costs went up.” Now the carmakers are making an effort to consider complete prices. They’re factoring in, around they could, the logistics and offer sequence expenses. That recognition is very, essential.
Carmakers may also be bringing in logistics at an early on phase and seeking at logistics in a wider structure. The greatest cost savings won’t be from trying to make transport less expensive at a plant, but taking a look at why logistics cost are so high for the plant. Is it because some of the biggest parts are being shipped from another manufacturing location? Could long-term term financial savings be achieved because they build a stamping location inside plant to produce those bigger components indeed there, hence lowering logistics costs significantly? By looking more generally than just just how can we lessen the transport or warehousing prices, they will certainly get the big cost savings, the billion-dollar cost savings.
A few of the carmakers and vendors have quite decentralized logistics and offer chain structures and they’re starting to bring these collectively and appear at how they may bundle volume and share assets. Exactly the same can probably be said because of it. Different flowers usually have various IT systems, that is crazy. They battle to keep in touch with one another, therefore having even more central systems will enable them to be better, which can be being carried out. But we don’t believe they’re spending sufficient in IT to essentially measure what they desire to measure, to comprehend what they need to understand, to enable them to reach the world-class standing that everybody aspires to.
Carmakers are beginning to take areas more seriously also. For example, in Asia, where there were poor motorist criteria, carmakers are purchasing driver education. The Indian government is also investing in motorist training. So these are some of the things they’re wanting to work with together.
Governments themselves are making an effort to develop solutions. The Chinese federal government is looking at logistics in its broadest structure. They’re attempting to look at logistics and provide chain, in place of only transport. Therefore the a valuable thing for people is they see automotive logistics as a test situation. They could glance at how to improve automotive logistics and other industries will observe suit.
The logistics companies are trying to globalize and they’re spending more in regions worldwide. It’s difficult to allow them to do this because the returns are going to be longer term, but about that is being carried out. Possibly one of several modifications needed should develop genuine partnerships involving the carmakers and logistics companies. There’s nevertheless that anxiety that they’re perhaps not real lovers. They believe carmakers would like them to take a position heavily in areas like Asia, nevertheless carmakers aren’t providing the lasting agreements that will enable that investment. Discover however that worry that when they’re going to India or whatever area, spend greatly in the folks, IT, assets and so forth, that after per year or two the carmakers could just drop them for less expensive vendors. There’s actually development becoming brought into various areas, but I still note that when it comes to logistics and provide sequence, they’re only trying to implement exactly what they’ve done in other places with slight tweaks for some transportation dilemmas, but there’s no genuine innovation in attempting to conquer several of those shared challenges.
Tend to be we performing enough to conquer these challenges? No, we’re maybe not. So there’s difficult for everyone, including JDA, to make sure that we-all do everything we can to ensure the automotive business leads automotive logistics investment to allow it to cultivate.
SCN: just what had been the greatest themes, trends or unexpected situations in the future out of your present seminar?
Yiakoumi: Our summit in Detroit in September had a rather good feel and there clearly was a lot concerning the continuing growth in the united states and just what it means for supply sequence. Mexico was a hugely essential issue; there’s excitement concerning the development of Mexico as a region. We looked at the challenges such as for example cross-border flows, handling the exports and imports, and dealing with the Mexican domestic marketplace. Logistics in Mexico is truly rather evolved, but you can still find high cargo rates, and questions about interface and rail ability.
There’s still anxiety how safe growth is. Around the period of the meeting the potential federal government shutdown was looming. So people are simply becoming a bit more mindful. In addition, the ability of level vendors isn’t enough to provide you with the carmakers because they need, nevertheless level vendors aren’t investing adequate partially because of that economic anxiety in the back of their thoughts.
There was most talk about the next generation because logistics isn’t a sexy area and automotive logistics is perhaps specifically not sexy. In the event that you speak to supply string pupils at universities and universities, specially around united states, all of them want to work for Apple and Google instead of the automotive industry. I do believe that people need certainly to enhance the level of importance of automotive logistics.
Another thing that people got out of this meeting is there must be much better logistics engineering—to go from cost cuts and to make sure that assets can be used efficiently. We are in need of much better utilization of IT in just about every area—in visibility, measurement, administration, in making things more electronic. A few of these things need a huge impact on enhancing automotive logistics. it is about measuring, understanding and enhancing the processes—getting ideal information from IT and deploying it in the right way.
