The Importance of Globalisation

Last week I chaired the Returnable Packaging session at the Automotive Logistics Europe Conference in Boon, Germany.

It was an extremely insightful and productive discussion with one of the main topics was the importance of globalisation.

Previously, automotive manufacturers would operate on a regional basis, selling models especially into continental and national markets. There was a requirement for global supply chains but for the standardised parts that were used in all models.

Now more than ever models are being manufactured and sold internationally. Tier suppliers are now required to ship globally as opposed to regionally. With this trend set to continue and grow there is a heightened need for an agile global supply chain.

Returnable packaging plays an integral part of building a global supply chain. It is no longer a matter of packaging components that will be transported within the same country or continent. Components are required in larger quantities in numerous locations around the globe and are travelling longer distances.

To create a sustainable supply chain that is able to keep up with trends and developments in the automotive industry only points in one direction – returnable packaging.

The industry now requires packaging that ticks the large as well as the small boxes. The large boxes are durability and size. If components are passing through numerous countries on their trip across the world using more than one form of transport, a solution needs to ensure quality upon delivery and comply with transporting requirements in terms of size in the various jurisdictions.

These were the areas that I am pleased to say came up during the session. It provides an indication to me that the OEM’s, tier suppliers and manufacturers know that they have to move and modify their supply chains in order to produce results.  

What will come out of the Automotive Logistics Bonn March 2014?

The purpose of the Automotive Logistics conference this year is to gauge where the automotive logistics industry has improved over the last year and to discuss where the industry is going in the next few years and beyond.

This will be the 12^th annual European conference held by Automotive Logistics Magazine and, like I mentioned above, it will be the same thing in terms of discussing the past, present and future. The obvious differentiation will be the content of the discussions.

After a difficult few years through the economic downturn the conference next week should be packed with exciting news and developments as the signs of growth appear to be flourishing.

During the downturn there have many cost down opportunities that have missed by tier suppliers and OEM’s , this appears to be down to being afraid to decisions. When it comes to returnable packaging solutions, a quick decision sanctioning a trial can prove to be effective in addressing issues you may have with your supply chain.

I would like to encourage better communication from tier suppliers and OEMs, if you have a problem then it is better to solve it now rather than later. This coming week at the conference there will be 350 people from the industry that all have problems and issues. It is a confidential event, so I would encourage people to communicate and then we can get on helping you.

“Exploration of Value” – logistics and the creation of a supply chain have always had value as a top priority. But now the issue has increased in importance due to other elements.

During economic difficulties when car sales plummeted the need to reduce costs was paramount to keep everything ticking over. Now there have been signs that an economic recovery could be in the pipeline, the need to keep those logistical costs down remains high. This looks set to continue as the automotive manufacturers will aim to recoup revenue to plug holes from poor economic performances over the last few years.

On the flipside, there has been an upturn in sales and production with manufacturers aiming to increase their margins, to capitalise on increased revenues and to prepare for what the future may bring.

Then there is the expansion of the global market. Investment in more models, investment in increased production and investment in new plants globally.

This all equates to large quantities of components and parts being required more often and in more locations. All of this heightens the competition and need to invest in logistics and supply chain solutions that provide maximum value for money.

All of these areas are then compounded by the increased expectations of quality by the customer.

Automotive Manufacturers – how are you looking to improve the performance of your supply chain and fulfil all expectations?

These are issues that need addressing at the present time but they will continue for the foreseeable future.

With all of these factors taken into consideration – Now there is No Reason to say No to Returnable Packaging.

All of the various elements of the issues facing the automotive industry and the supply chain can be catered for by using ReturnablePackaging.

I look forward to the discussions that the conference will bring up and delving into why all automotive manufacturers should shift to returnable packaging in order to enhance their business.  

Is Expendable Packaging too expensive?

In a recent article that I was quoted in Duncan Murcott, IPS Lando, claimed that expendable packaging is more than being a cheap solution which is a widely circulated point within the industry.

Duncan states in the article that the benefits include maximising cubic utilisation, minimising damage, minimising re-packing, choosing the right material then reducing production and handling costs.

There are other products on the market that do this, if not better. Ensuring that you are aware of all the information is key.

All of these benefits and efficiency improvements are delivered by the range of Macro Plastics’ products. They deliver on all of those mentioned above to their fullest potential making them a sensible returnable packaging solution.

In the article it states that Macro Plastics provide one-waytrip solutions. We supply the pooling and logistics companies who then offer one-way journeys. This is an additional reduction to the overall cost as the returnable packaging doesn’t require a returned cost.

Expendable packaging is not in line with the industry’s vision towards lean and low-cost. Cardboard does not only add handling procedures inbound as it cannot go straight to the assembly line. It incurs an additional cost & procedure as it is an extra outbound component when it is disposed.

Cardboard cannot go to line side as it creates dust and an unclean environment with the cars powertrain and electronics. So if you ship in expendable you have to ship via a transition warehouse who will unpack the parts from cardboard and into plastic before they go to the assembly line........so no 1TA (one touch assemble) as the parts are being handled twice and risk of damage. One touch assembly helps to reduce the risk associated with safety standards which is an important area. 

Yes, it is all in the design. Designing a product that reduces the carbon footprint, improves quality and efficiency, and reduces costs and the product can be used again. This comes in the form of ReturnablePackaging.