Automotive industry – production and transport as self-regulating system
Regular service provided to automotive industry is a considerable challenge to any logistic operator. This is the industry sector characterized by great dynamics and variety of orders. What is more, the haulier bears immense responsibility. Any late delivery of shipment may affect adversely the manufacturing process of the client.
Automotive industry stronger than one might think
Perhaps our country does not boast too many manufacturing centers of international automotive corporations, but make no mistake, this sector does not flounder. It is just the opposite...
Automotive industry is one of the most dynamic sectors in Poland. As for the goods volume, it is the second best business. Nearly 10% of the Polish industrial output and every sixth zloty of Polish export come from the automotive industry. And the Polish car export make 18.8% of the country's total export volume.
This is because the Polish automotive market gathers car parts manufacturers in the first place, who supply their goods to car manufacturers and independent distribution networks. Very few know that some Porsche models are fitted with seats made in Poland. 80% of all car parts are manufactured by independent producers for the purpose of new cars assembly, and a mere 20% is manufactured by automotive corporations and it basically includes vehicle structural components - based on the '2014 Automotive industry in Poland' report by the Association of Car Parts Distributors and Manufacturers (SDCM). According to Polish Information and Foreign Investment Agency there are over 900 car parts manufacturers operating in Poland; about 300 of them with foreign capital.
The SDCM report reveals that in 2013 car parts and accessories manufactured in 900 local factories amounted to 60 billion zlotys' worth. To give a picture of this sector's dynamics it is enough to look at corresponding figures from previous years - 53 billion in 2013, 51 billion in 2012, and 51 billion in 2011. It is no wonder that Poland is called a car parts manufacturer region.
What is more, half of car parts production is destined for export. Poland exports over 1 million tons of car parts and accessories. In 2013 it amounted to 30 billion zlotys' worth - three times as much as export of coal, coke and briquette. It is true that the largest receivers are Germany (over 31%), Great Britain (9.42%), Italy (9.24%) and the Czech Republic (7.44%), but Scandinavia also imports goods like bus chassis, fabrics for heated seats, car floor mats, tires, engines or even door sealing gaskets.
One cannot fail to notice that one of the key elements in running your business successfully as a car parts manufacturer is the choice of a reliable and trustworthy logistics operator who will deliver your product onto the production line in time.
Carrier - a weakest link?
The automotive industry due to its specificity is considered to be rather difficult, and this is why not every logistics operator is willing to provide service to car companies. Another factor which drives them away is a common belief that the requirements set by automotive companies determine trends and influence development of logistics in general.
As far as automotive logistics is concerned, transport precision is a decisive factor in cooperation with hauliers.. A haulier must take into consideration their system capabilities within process integration with their client and readiness to report cooperation indicators in accordance with the model established in the client's automotive business.. Besides, a logistics operator must be on continuous standby to provide service in the supply chain. It does not only apply to deliveries of subassemblies, but also to the logistics market of spare parts and returns where the movement of goods is often unplanned, and a unit size of shipment is usually small.
The destination of the logistics service may be another handicap to those operators who cooperate with automotive industry. It is true that very few logistics operators will find countries of Western Europe quite a challenge, but to provide transporting service to automotive industry in Scandinavia is a different story and only the most experienced carriers take up a challenge like this. Carriers are aware of the factors which may hinder prompt and timely deliveries. Contracts for an indefinite time with ferry operators are a minimal security here as they will provide a fixed place on a ferry regardless of the tourist or seasonal occupancy; and so is a modern truck fleet with experienced drivers which is likely to handle harsh Scandinavian winters. All this will help minimize factors a logistics operator has little control of such as atmospheric conditions.
Furthermore, a logistics operator must realize what responsibility they accept when providing 'Just in time' and 'Just in sequence' services, which are key to the automotive industry.
Just in time and Just in sequence – the cornerstone of automotive industry
If your client expects a delivery of components ordered from a manufacturer to reach their production line at 20.00 hrs on a scheduled day, a logistics operator must do anything within their power to meet the deadline and avoid idle wait at all cost. Even though sometimes a distance of about 1500 km needs to be covered in weather conditions beyond their control. In this case experience and operational efficiency including a sea route will be of utmost importance.
Completion of Just in time and Just in sequence services will help lower stock level and thus reduce inventory carrying costs. Other benefits for both business partners include quality improvement, increased productivity, or greater operational stabilization. They also help cut red tape, simplify planning process or reduce losses.
Shorter, stable order completion cycles and better control over the purchasing process on the service buyer's part play also an important role. All logistics elements improve like limiting cooperation to a few trusted suppliers who guarantee high quality of delivered products.
6 key elements worth considering when choosing a logistics operator for automotive industry:
- Flexibility– carrier's capability to integrate with a client's production processes
- Readiness to serve the supply chain
- Experience in serving Scandinavian distances
- Experience in automotive industry
- Contracts for an indefinite time with ferry operators
- Completion of Just in time and Just in sequence services
