Procurement
• Procurement • Payables management • Supplier payment and consolidated invoicing • Vendor performance monitoring and exception
reporting • Joint process improvement with vendors
Large line-side area is needed to accomplish unpacking, kitting, and possibly sequencing of parts before feeding to assembly line
Individual vendors might rent warehouses for themselves, with limited scale to share with other vendors
Demand indirectly drives manufacturing volume through forecasts
Suppliers
Manufacturing Warehouse Wholesale/Retail
• The rate of supply was set by the manufacturer in advance, based on expected demand
汽车制造行业的物流和 供应链管理[1]
2020年7月18日星期六
Agenda
Our understanding of the automotive logistics needs What is VMI – definition, procedures and benefits Challenges of VMI in China Case study Brief introduction to China Logistics Company
2. The manufacturer sends product activity data to the supplier. This product activity is based on warehouse movement of product consumed at the assembly line level.
Consolidation and Loading Center is commonly used to reduce the complexity in coordinating multiple vendors
Potential Issues in Simplest VMI Model
Quality of delivery services from vendors to line-side might be different
3. Based on the agreed inventory maintenance scheme, the supplier edits, approves and releases the suggested purchase order.
4. The manufacturer approves this purchase order and send it to the supplier.
• It was the role of the logistics providers to
ensure a just-in-time supply of
components
“Demand-pull” Logistics Chain
Manufacturing driven by actual demand
Service Parts Distribution Center
Dealer/ Service Station
Supply chain management (SCM) is the strategic management tool that coordinates the material and information flows across the value chain to support adaptiveness
How Consolidation and Loading Center Approach
Helps
Consistent delivery service to lineside
Optimal shipping volume to reduce transportation cost and inventory cost
The vendor is in total control of the timing and size of the order being placed.
The vendor is responsible for creating and maintaining the inventory plan.
Freight and Distribution Coordination
• Overall freight coordination • Full load truck carrying • Less-than-load truck carrying • Small lot (less than 150 pounds) carrying • Order consolidation • Delivery scheduling • Expediting special / rush orders • Returning and reprocessing undeliverable orders • Delivery tracing • Performance and exception monitoring and reporting
Difference between traditional business model and VMI model
Purchase Order Placement
Inventory Transparency
Inventory Replenishment
Inventory Plan
Traditional
Bonded Warehouse for Import Parts
Consolidation and Loading Center
Suppliers
Logistics for Production Parts Logistics for Complete Vehicles
Plant
Dealer
Logistics for Service Parts
Reduced requirement on line-side warehouse space
Coordination between suppliers and production line possible to promote synchronization and JIT
Simplest VMI workflow
Manufacturer
2
3
1
4
Suppliers
1. The manufacturer approves the purchasing terms with suppliers, including the commonly agreed inventory responsibility and maintenance scheme.
When a customer needs product, they place an order against a manufacturer.
Only order is transmitted to supplier when product is needed.
The customer is in total control of the timing and size of the order being placed.
Suppliers
B2B
Manufacturing Direct Delivery
Exchange
Source: Lehman Brothers, A.T. Kearney Analysis
Third-party logistics providers (3PLs) can directly, or through a partner network, provide a range of services
“Demand-pull” value chain requires the companies to be flexible and able to “control” a large part or the entire supply chain
“Supply-push” Logistics Chain
Our understanding of the automotive logistics needs
An automotive OEM’s logistics netbound operations of parts and finished vehicles
Vendors’ shipping volume might be very small given more frequent “demand-pull” orders
Vendors might need a large line-side buffer to comprise a full-truck load and make-up a safety stock
Minor Assembly and Packaging
• Order preparation / assembly / consolidation • Sourcing of packaging materials • Printing of corrugate and/or linerboard materials • Labeling • Shrink wrapping of cases and pallets