Value Creation Through 3PL for Automotive Logistical Excellence

Abstract

Change is the only constant in today’s business environment. Flexibility and adaptability have become key factors of organizational success. In today’s global business environment, organizations not only faced with issues of where to source their parts but also how to ship and store these parts effectively and efficiently. This issue is magnified as the complication of the products produced increases. Automotive industry has highly complicated parts which are sourced from around the globe. Through 3PL strategies, an automotive manufacturer can minimize downtime risk, reduce delivery lead time and ultimately improve its ability to adjust to the changing market demand. In this paper, we investigate the logistic factors affecting the automotive industry and discuss the challenges. An actual case study from DB Schenker, a German 3PL company, is used to illustrate the benefits of an effective VMI, information technology and inventory tracking in the supply chain. It can synchronize information and physical flow of goods across the supply chain. DB Schenker uses state-of-the-art storage and order-picking technologies in order to meet the very precise production time schedule, while keeping warehouse costs to a minimum.