DHL AUTOMOTIVE Parts Logistics Challenges Managed!

Transcription

1 DHL Customer Solutions & Innovation DHL AUTOMOTIVE Parts Logistics Challenges Managed! August 2010 Shay Dorgan - Director, Customer and Emerging Market Development

2 Agenda Page 2

3 Aftermarket is crucial to the survival of the industry Revenue Profit Customer Loyalty New cars, 14% Good Service 10 New cars, 45% Interior Design 9.6 Aftermarket, 22% Aftermarket, 54% Value for Money 9.4 Used cars, 19% Insurance, 11% Other, 2% Used cars, 1% Insurance, 27% Other, 3% Reliability Pleasure to drive nd largest revenue generator Over half the industries profit Highest single influencing factor for re-purchase The aftermarket business is critical to the industry. The dominant market position the OEMs have in this segment is under attack from different sources Page 3

4 Agenda Page 4

5 Supply Chain managers are under huge pressure to Handle Demand Fluctuations & Expectations Level Sensitivity in market causes reactive fluctuations of demands Agility at the lowest costs required in supply chain management Demand and supply changes result in the need to reconfigure companies supply chain Reduce assets Maintain the Health of the Supply Chain Outsourcing of logistic activities: warehousing, transportation Reducing inventories Strategic positioning of inventories to reduce inventory rebalancing and optimize lead time/costs to serve customers Require constant feedback and check on health of supply chain Benchmarking supply chain with competitors to understand where is best-in-class Page 5

6 Supply Chain managers are under huge pressure to Reduce Costs Reductions required on overall transportation and warehousing costs Reductions in shipment volumes result in the loss of economy of scale Strong demand for oil (Emerging Markets) Energy prices will continue to increase (long term) due to rising extraction costs Increasing transportation costs Transportation optimisation Multimodal approach Page 6

7 Supply Chain managers are under huge pressure to Technical Challenge Increasing complexity in today s vehicles Highly skilled technicians Increase the number of parts in the supply chain Digital information flows are growing Customer s expectations sometimes rise faster than capabilities RFID technology Networks and satellite communications Elimination of physical media Page 7

8 Supply Chain managers are under huge pressure to Environment Challenge CO2 footprint and how to measure Overall CO2 reductions The greatest environmental, social and economic threats facing the planet. The warming of the climate system is evident from observations of increases in global average air and ocean temperatures (melting of snow and ice, and rising global mean sea level). Sustainable transportation / logistics and greening supply chains are becoming a must! Page 8

9 Agenda Page 9

10 Network Optimization Software & Methodology DHL expertise and a software to design an optimal transportation network Input Parameters Optimization Engine Output Locations of suppliers, plants, DCs, Warehouses, customers Infrastructure configuration Product demand and customer service requirements Transportation modes, rates, and lead times; warehousing rates Physical flows of products Constraints, e.g. capacities Assumptions, e.g. on incomplete information Optimization algorithm (e.g. center of gravity) Typical objective scenarios: Minimization of cost Achieve required service level Create green-field supply chain Combine multiple discrete supply chain networks Redesign network for change in demand or increase in costs CO 2 reduction Adhere to constraints (e.g. service levels, capacities, safety stock) Optimized Scenario Logistics Cost Transportation Warehousing Inventory Service Levels Lead time Order cycle time Percent of demand filled, etc. Source: DPDHL Inhouse Consulting DHL Page 10

11 Local Spare Parts Distribution for Car Manufacturer Innovative local spare parts distribution drives sales and improves customer service for a premium car manufacturer Customer Facts Region Global Sector Automotive Company Premium Automobile Manufacturer Customer Challenge DHL Solution Customer Benefits Upgrade spare parts distribution model from overnight next day to up to four deliveries a day Local distribution warehouse locations with good proximity to service centers Cost effective and flexible warehousing solution to handle bursts of activity Warehouse collaboration to provide shareduser local distribution Optimal site location using route planning and design expertise Cross-training of existing staff to handle bursts of activity Flexible warehouse solution providing receipt, put away, pick and dispatch Improved after sales customer service levels Increased sales of high margin spare parts Reduced inventory costs at service centers Higher volume of service and repair work DHL Page 11

12 DHL Global Forwarding automotive competency centre network ACC Germany Frankfurt ACC AMNO Atlanta ACC Hungary Budapest ACC China North Beijing, Shanghai ACC Mexico Mexico City ACC India Delhi, Mumbai, Chennai ACC Asia Sao Paulo ACC Location Page

13 Key ACC Service Elements Global Automotive Solution 1 Forecast Order Management Planning Booking Reporting Overall Visibility, Control & Escalation Supplier 1 Warehouse 1 Warehouse 2 Supplier 2 Airport / Port OR Cross Dock Airport / Port OR Cross Dock Supplier 3 Warehouse 3 Page

14 Automotive Competency Center creates value Transparency / Monitoring / Escalation Six Sigma Experts increase productivity midterm planning increase cost savings increase customer and employee satisfaction drive the escalation process provision of full information access to the automotive the automotive network OEM, supplier, carrier 24/7 service availability Dedicated IT Tool Dedicated automotive know-how Strategic & tactical planning Solution design for automotive Global footprint and local multilingual teams Operational Excellence ownership for the payment flow intern tariff audit a/r controlling KPIs Benefits midterm planning Transportation Concepts Premium Freight Network Page

15 Conclusion Supply Chains will require a considerable revision Vehicle Components doubled in the last decade and will grow again due to rising consumer expectations in terms of Comfort Safety Environment/Fuel efficiency Technology Growth in emerging markets poses severe infrastructure and management issue Supply Chains both inbound and aftermarket will be under great stress to cope with another major parts range expansion Overall, the Logistics supporting the aftermarket industry will need dramatic change to cope with rising consumer expectations, parts prolifertion, faster response times, and all at reduced cost! Page 15

16 Thanks for your attention Shay Dorgan - Director, Customer and Emerging Market Development Page 16