The Importance of the EU to the Supply Chain

Which side of the EU debate is the automotive and supply chain industry?

How could the EU debate affect these industries?

It is important to look at where the automotive industry is currently and where it is heading in the future, then add the European Union to the question.

The UK is the second largest manufacturer in Europe this year behind Germany; this is a six year high and an interesting sign towards the future. This performance is down to number of great performances by a group of manufacturers.

 Jaguar Land Rover has been the main contributor with the new Range Rover and Jaguar range this is a manufacturer that is going to be 40k cars short of sales this year. The majority of JLR’s vehicles are exported, mainly to the emerging Asian markets which are an indication why they are building plants around the globe.

Nissan are another car manufacturer that has been a huge contributing factor in the UK success in the automotive sector with the new Micra and Qashqai being built in Sunderland. The factory is the most productive in Europe.

General Motors have ramped up production in the UK and closed down their plant in Germany. Toyata and BMW are also contributing with the large number of vehicles they are exporting from the UK. If that isn’t a big enough indicator of where the UK are going in the European pecking order then what is.

The majority of the vehicles coming off the production lines of manufacturers in the UK are being exported; therefore the industry needs a helping hand moving them off the island and onto mainland Europe or through European waters. If there is an exit then this task becomes harder and more expensive as the taxes and fees will be increased as the UK will no longer be part of the club.

Before we get to the exporting stage, the manufacturers need their parts delivered in order to make the car and then to sell it. Importing parts and logistics is a factor that involves European Union membership.

Whichever direction the UK automotive industry looks the European Union is going to involved in some shape or form and for the good and the bad.

With the future picking up for the manufacturers and supply chain they are going to need as much help as possible but on the flip side they need to safe guard against competition and sustainability. 

Automotive Logistics Europe Conference, Bonn

Overall, the conference was filled with some very exciting developments for the automotive industry and the supply chain.

With growth both in Europe and globally, the supply chains are increasing in complexity and standards of performance. With an increase in volume and need for new systems and expertise it can only spell good news for logistics and packaging supplies.

It was interesting to hear that VW are looking to reduce their carbon emissions by 25% by 2018. The environmental impact of transportation has been a burning issue for a while and is a bold move in the right direction. In terms of returnable packaging reducing emissions is high on the agenda. With manufacturing globally on the rise ensuring the utilisation of the capacity in packaging is essential, if this is done properly a reduction in the environmental footprint will follow.

Also, just the principle of returnable packaging aids this. Expendables are disposed of and require a recycling process. Just by using a packaging solution more than once will go towards improving the footprint.

Marzell Bandur, Director of Supply Chain Planning at Opel, spoke about looking at packaging design, supply flows and consideration for costs.

“For example, we are transporting more parts, larger part, over larger distances. With carbon dioxide emissions taxes, as well as road toll prices, it means that the costs involved along the supply chain are much higher”. – Marzell Bandur.

All of the points made above look directly towards the potential of returnable packaging. A returnable packaging solution cannot only cover those areas but deliver on them with one simple solution which can provide a clear breakdown of costs and savings.

Lastly, it was refreshing to see that the importance of logistics to the whole business model was brought up. Having a representative from supply chain and logistics on the board of management is something that other industries have embraced; this was pointed out by delegates from Starbucks and Amazon. A lesson to be learnt by the automotive industry in my opinion.

Levent Yuksel, from Jaguar Land Rover, made some great points on the issue.

“Logistics needs to be thought of as cross-functional, it’s as much about trying to keep customers, manufacturers and suppliers all happy. We should be putting a logistics person on each company’s executive board. This would give a competitive advantage. We shouldn’t be thinking ‘logistics is a cost and a waste’”.

Logistics and supply chain have an impact/influence on all areas of the executive board so it makes sense to place someone there. And if done correctly and effectively logistics can be a cost that works and reduces waste to the overall manufacturing process that both aid the bottom line.