Logistics - the way cars and components are moved from one place to another - is a key to the industry's drive to cut costs. Every aspect of the car business is affected: from the distribution of parts from supplier and supplier, to the transportation of newly-assembled cars to dealerships. Logistics account for 30 percent of the cost of developing, building and distributing cars. So the potential for streamlining and savings is huge. In August, Automotive News Europe will publish an in-depth supplement on this crucial sector. On this page, we look at two major trends: the growing importance of logistics within the assembly plant; and the expected move to assembling of parts and modules by major logistics companies themselves.
ANTWERP, Belgium - Developing more efficient distribution systems between supplier and assembly plant is not the only challenge faced by automotive logistics experts. Increasingly, problems inside the assembly plant -called micrologistics - are being solved by outside contractors.
'Every carmaker studies labor management and micrologistics, but the outsourcing of such work is becoming increasingly popular,' said Jos Hoogstoel, managing director of Jovico, a small automotive labor-management consultancy here in Antwerp.
Analysts say outside micrologistics experts can typically make workforces 20 percent more efficient.
'When called in as an external consultant, you do not have to deal with internal politics,' said Hoogstoel. 'You only need the commitment of the management to change things rapidly.'
Jovico has worked on micrologistics projects at NedCar - the Volvo-Mitsubishi joint venture in the Netherlands - and for Renault and Dutch truckmaker DAF.
At NedCar, where the Volvo S40/V40 and Mitsubishi Carisma and Space Star are made, Jovico analyzed 700 workstations on the assembly line.
Hoogstoel defines micrologistics as 'every flow of parts and components between containers and workstations; all human movements, routing and workloads; and the mix of labor operations related to differing equipment levels on each car.'
Jovico's goal is for each employee to work at 100 percent capacity - no more and no less.
'Our principle is that an employee has an obligation to work as hard as 100 percent,' said Hoogstoel. 'But he also has the right not to work more than 100 percent.'
In the past, due to variations in the model mix and equipment levels between Mitsubishi and Volvo, individual employee performance levels at NedCar varied significantly, he said.
Jovico found worker input varying between 80 percent and 130 percent per car. This caused stress, labor unrest and disruption to the assembly process.
'If a car with standard equipment is followed by three cars with lots of accessories, such as air conditioning and anti-lock braking systems, the workload peaks too much, for too long,' said Hoogstoel.
Jovico advised NedCar to create a constant stock of 250 painted body shells, from which an optimal selection for smoother assembly sequences is made. 'When workers have to do more applications on one car than another, they might be forced to walk seven or eight paces instead of the planned five paces,' said Hoogstoel.
Limiting the physical movement of workers in the assembly process is essential.
At NedCar, Hoogstoel says 2,000 time errors per shift have been reduced to 69 since last year.
Hoogstoel said some suppliers still do not understand the constraints of assembly workers. 'We have seen air-conditioning systems arrive at the line heavily wrapped in thick plastic. It took each worker tens of seconds to unwrap the systems,' he said.
NedCar's goal was a 20 percent labor saving at the assembly line. 'Between 16 May and 12 December last year, we saved 28.1 percent of the average worker's time on one third of the line,' said Hoogstoel. 'That means a reduction from 221 to 159 workers for one shift.'