Excerpt from Automotive Logistics article: 09 October 2017 | Christopher Ludwig
As in North America, Ford’s footprint has changed significantly in Europe over the past two decades as it cut capacity and unprofitable models, with resulting impacts on logistics flows. At the end of 1990s, the carmaker typically sold and produced around 2m vehicles per year in Europe, almost all of that in its core 20 markets in central and western Europe. Although Ford’s volume remains lower than its historic highs, its logistics is significantly more complex. Across the European network, Ford has longer inbound and outbound logistics flows across widely differing infrastructure. It has also seen a substantial rise in global imports and exports both for material and vehicles in and out of Europe.
Along with supply chain geography, customer expectations and vehicle ordering are also more complicated. “We have customers demanding more features and service on everything we offer them with vehicle variety much higher, compared to 20 years ago,” Willmann says.Such variation has led to increases in part numbers across the supply chain and plants, putting pressure on supplier delivery, pick-up frequencies and network optimisation. If transport plans do not quickly reflect changes in volume or engineering, Ford’s logistics flows rapidly become imbalanced or risk high levels of parts redundancy. Assembly lines would also run out of room for parts without adaptations in material flow strategies.With the rise in global material exchanges, Ford’s supply chain is also more subject to risk and disruption from external events. Over the last decade, incidents such as the Icelandic volcanic ash cloud in 2010, the Japanese tsunami of 2011 and a number of supplier accidents or strikes have exposed supply chain vulnerabilities previously unseen by most companies.
Ford has also worked with its LLPs to improve tracking and visibility. Over the past two years Ford and DHL have combined telematics tracking of trucks across its inbound network with information from Ford’s production system to gain real-time information of incidents. The data proved particularly useful during the transport disruptions between France and the UK in Calais last year as a result of the ‘Jungle’ refugee camp. Earlier this year, when Italy suffered a significant earthquake in Umbria, Ford was able to see how it might impact both tier one and tier two suppliers, helping it to decide quickly how to mitigate supply shortages.
What ultimately differentiates modern businesses in the risk management landscape is that they embrace the innovative technologies available to them in order to proactively mitigate risk rather than simply react to supply chain disruptions as they occur.
Further information can be found at the full Automotive Logistics article published here.