People. Processes. Infrastructure. Capacities.

In today’s global automotive industry, supply chains function most efficiently when all the major elements are integrated from end-to-end. Because so much of the modern supply stream consists of disparate production networks, complex partnerships, and markets and customer pools spread out across the globe, the ability to coordinate the people, processes, and products critical to effective supply chain management is key in such a variant-rich industry.

Of course, as with any principle or concept, it’s important to understand what supply chain integration truly means. Full supply chain integration means much more than simply managing the movement of materials and resources and addressing logistical issues thereof. Rather, supply chain integration means an acknowledgement that production stages of the supply chain must exchange data, and analytics, and time-sensitive information in real-time with other points in the supply network.  

In a recent entry, we discussed the ins, outs, and benefits of leveraging LTL (less than truckload) shipping in the automotive supply chain as a critical driver in reducing freight costs, increasing efficiency, and enhancing visibility and agility from the production line to delivery at the customer’s doorstep. We also briefly looked at why some supply chain planners and managers are still reluctant to embrace LTL as a viable method of transportation management, dispelling some misconceptions about LTL as a key value proposition in today’s global supply landscape.

Today, in something of a part II of that discussion, we’ll examine another freight management strategy and its potential impact for companies seeking to optimize their transportation management via reducing costs and increasing productivity and reliability. Intermodal shipping, which has been viewed in the past as a problematic strategy for the movement of products, has in recent years become an increasingly viable and valuable component of a company’s freight platform.

Imagine trying to drive a car down the street using the rear view mirror as your only method of navigation. You can’t actually look forward to see where you’re going, what lies ahead, or how to successfully get where you need to be - instead, all you can do is look backwards at where you’ve already been and make your best guess as to how to keep moving forward without causing a horrible wreck.

Sounds incredibly difficult, right? Yet this is the situation many OEMs and automotive manufacturers find themselves in when striving to create accurate forecasting and planning based solely on descriptive analytic models - data that merely paints a portrait as to the current state and productivity of the supply chain - rather than predictive analytic models, which have in recent years been a value-added proposition for OEMs in fostering efficient demand planning for future production programs.

Predictive analytics, with its reliance primarily on Big Data, essentially provides OEMs with a windshield for enhanced end-to-end visibility in order to better see how agile, transparent, and responsive their value chain is, and what steps needs to be taken in order to modify or alter production and supply practices to create an optimized future supply stream.

Here’s a staggering statistic: A 2010 report from the U.S. Environmental Protection Agency (EPA) found roughly three-quarters of greenhouse gas emissions in the manufacturing industry originate in the supply chain. That’s about 75 percent. In addition, the report also found an estimated 50 percent of total expenses and greenhouse gas emissions stemmed from the manufacturing supply chain industry, which makes for a great deal of both resource investment and harm to the global environment at the hand of manufacturing and supply companies.

What’s perhaps most startling about this stat is that it’s more than 5 years old and doesn’t take into account the rise in emerging markets and regions in today’s automotive supply stream. In an industry that is increasingly becoming more competitive and crowded, it’s not a far cry to imagine these numbers have, if not worsened, remained consistent during these last five years, and many industry analysts believe the supply chain’s negative impact on the environment will only worsen unless manufacturers and suppliers take significant steps to curb their carbon footprint.

Ever listen to a great orchestra or symphony perform a classic piece of music? If so, then you’ll know how crucial the balance and delicate interplay between each instrument is in creating a harmonious sound that achieves a certain artistic goal or elicits a desired emotional response.

Each part must be played with precision and an uncanny sense of timing, and the musicians must know the piece of music like the back of their hand in order to add complexity and depth to the overall piece of music rather than subtract.

Just like a great symphony, much of the precision, accuracy, efficiency, and insight is true for the automotive manufacturing and supply landscape in an effort to create end-to-end (E2E) visibility across a company’s entire value chain. Such visibility is critical in cutting through the complexity of today’s global supply network and leveraging best practices to ensure the right products arrive at the right place at the right time in the right quantities. Obviously, this is not only crucial to keep up with demand and planned production schedules, but it’s also integral in reducing waste, increasing efficiency, and enhancing communication and collaboration at each touch point in the supply chain.

Periodically throughout the year, we invite flexis team members to write brief blog entries about some of the most pressing, complex, and interesting conversations currently taking place in today’s global production and supply chain industry. The goal of these entries is to provide insight into these discussions from an insider’s perspective and to get an idea about what’s on the mind of today’s supply chain professionals.

Our first entry comes to us from Hansjörg Tutsch, Vice President of Research for flexis AG, who discusses the importance, opportunity, and challenges of maintenance management for today's manufacturers. 

Maintenance management in many manufacturing companies still means the planning and execution of necessary or routine maintenance measures. But even so, these concerns are often placed behind the requirements of production. Depending on the industry, between 15 and 40 percent of all production costs can be allotted to production-related maintenance tasks, which significantly impacts the productivity and competitiveness of a company. With annual sales volumes upwards of $250 billion, the maintenance sector plays a much larger role in the macroeconomics of manufacturing compared to other industry sectors.