MILTON KEYNES, UK - Global sourcing places new demands on traditional logistics companies, according to an Anglo-German company.
Hays Distribution must move beyond conventional warehousing and distribution, says Steve Brimfield, managing director of its Automotive and Industrial Division.
Hays Distribution lists Ford, General Motors Europe, VW, BMW, Rover, Toyota, Nissan and Mitsubishi among its European component customers.
Hays is one of a dozen major logistics companies in the European auto industry. It has headquarters in Milton Keynes, UK, and Mordhorst and Daufenbach, Germany.
'The market demands that manufacturers constantly examine how they can produce vehicles quicker, more efficiently and with greater flexibility,' Brimfield said. 'One consequence is that they are increasingly sourcing components on a global scale, placing pressure on the supply chain.'
Hays has found itself investing in engineering skills vital to sub-assembly operations, which help it deal better with suppliers and assemblers.
Other new areas involve hardware management, salvage and repair, reworking and repacking of obsolescent parts, export packing and container cycling and management.
'Few supply chains can be longer or more complex than those associated with the automotive industry,' said Brimfield.
Sophisticated sequencing with just-in-time delivery goes a long way to minimizing inventory costs and releasing valuable plant space, but the savings of lean supply could easily be overbalanced by the cost of achieving it, Brimfield warned.
'Controlling hundreds of component sources from all over the world can be very expensive if not handled properly,' Brimfield said. 'There is a great danger of ending up with too much stock occupying too much space and needing too many people to control it.'
Even worse, he said, is the cost of product shortages causing a production line to stop.
'Production downtime can be catastrophic.'
To establish a lean but solid system, Hays analyzes the whole supply chain. 'Rather like an assembly line, it has to be balanced,' said Brimfield. 'The most economic option for one link might not lead to the most cost-effective solution overall.'