汽车制造行业的物流和供应链管理课件

AutoLogisticsandSupplyChainManagementSummit2003ThePracticeofVMIinChina1AutoLogisticsandSupplyChainManAgendaOurunderstandingoftheautomotivelogisticsneedsWhatisVMI–definition,proceduresandbenefitsChallengesofVMIinChinaCasestudyBriefintroductiontoChinaLogisticsCompany2AgendaOurunderstandingoftheAnautomotiveOEM’slogisticsneedscoverbothinboundandoutboundoperationsofpartsandfinishedvehiclesPlantSuppliersConsolidationandLoadingCenterServicePartsDistributionCenterLogisticsforProductionPartsLogisticsforServicePartsLogisticsforCompleteVehiclesDealerDealer/ServiceStationBondedWarehouseforImportPartsOurunderstandingoftheautomotivelogisticsneeds3AnautomotiveOEM’slogisticsSupplychainmanagement(SCM)isthestrategicmanagementtoolthatcoordinatesthematerialandinformationflowsacrossthevaluechaintosupportadaptiveness

4Supplychainmanagement(SCM)“Demand-pull”valuechainrequiresthecompaniestobeflexibleandableto“control”alargepartortheentiresupplychainSuppliersManufacturingDemandindirectlydrivesmanufacturingvolumethroughforecastsWarehouseWholesale/Retail“Supply-push”LogisticsChainSuppliersB2BExchangeManufacturingDirectDelivery“Demand-pull”LogisticsChainManufacturingdrivenbyactualdemandTherateofsupplywassetbythemanufacturerinadvance,basedonexpecteddemandItwastheroleofthelogisticsproviderstoensureajust-in-timesupplyofcomponentsTherateofmanufactureisdeterminedonareal-timebasisbytherateofdemandWhilethismodelismoreefficient,itrequiresperfectintegrationofalllogisticsoperationswithinoneprocessSource:LehmanBrothers,A.T.KearneyAnalysis5“Demand-pull”valuechainrequThird-partylogisticsproviders(3PLs)candirectly,orthroughapartnernetwork,providearangeofservicesProcurementPayablesmanagementSupplierpaymentandconsolidatedinvoicingVendorperformancemonitoringandexceptionreportingJointprocessimprovementwithvendorsOverallfreightcoordinationFullloadtruckcarryingLess-than-loadtruckcarryingSmalllot(lessthan150pounds)carryingOrderconsolidationDeliveryschedulingExpeditingspecial/rushordersReturningandreprocessingundeliverableordersDeliverytracingPerformanceandexceptionmonitoringandreportingOverallinventorymanagementOptimizingsupplierorderschedulesOptimizingdealerorderschedulesCertificationofincomingshipmentsBarcodingPerformanceandexceptionmonitoringandreportingTrackingandReportingSystemsaccessibleviaInternetMaterialResourcePlanningOrderpreparation/assembly/consolidationSourcingofpackagingmaterialsPrintingofcorrugateand/orlinerboardmaterialsLabelingShrinkwrappingofcasesandpalletsFreightandDistributionCoordinationWarehousingandInventoryManagementMinorAssemblyandPackagingProcurement6Third-partylogisticsproviderDifferencebetweentraditionalbusinessmodelandVMImodelTraditionalVMIPurchaseOrderPlacementWhenacustomerneedsproduct,theyplaceanorderagainstamanufacturer.UnderVMI,thevendorgeneratestheorder,notthecustomer.InventoryTransparencyOnlyorderistransmittedtosupplierwhenproductisneeded.Thevendorcanviewthe“real-time”stocklevelofeveryitemthatthecustomercarriesaswellastruepointofconsumptiondata.InventoryReplenishmentThecustomerisintotalcontrolofthetimingandsizeoftheorderbeingplaced.Thevendorisintotalcontrolofthetimingandsizeoftheorderbeingplaced.InventoryPlanThecustomermaintainstheinventoryplan.Thevendorisresponsibleforcreatingandmaintainingtheinventoryplan.7DifferencebetweentraditionalSimplestVMIworkflowManufacturerSuppliers2341Themanufacturerapprovesthepurchasingtermswithsuppliers,includingthecommonlyagreedinventoryresponsibilityandmaintenancescheme.Themanufacturersendsproductactivitydatatothesupplier.Thisproductactivityisbasedonwarehousemovementofproductconsumedattheassemblylinelevel.Basedontheagreedinventorymaintenancescheme,thesupplieredits,approvesandreleasesthesuggestedpurchaseorder.Themanufacturerapprovesthispurchaseorderandsendittothesupplier.8SimplestVMIworkflowManufactuConsolidationandLoadingCenteriscommonlyusedtoreducethecomplexityincoordinatingmultiplevendorsQualityofdeliveryservicesfromvendorstoline-sidemightbedifferentVendors’shippingvolumemightbeverysmallgivenmorefrequent“demand-pull”ordersVendorsmightneedalargeline-sidebuffertocompriseafull-truckloadandmake-upasafetystockLargeline-sideareaisneededtoaccomplishunpacking,kitting,andpossiblysequencingofpartsbeforefeedingtoassemblylineIndividualvendorsmightrentwarehousesforthemselves,withlimitedscaletosharewithothervendorsConsistentdeliveryservicetoline-sideOptimalshippingvolumetoreducetransportationcostandinventorycostReducedrequirementonline-sidewarehousespaceCoordinationbetweensuppliersandproductionlinepossibletopromotesynchronizationandJITHowConsolidationandLoadingCenterApproachHelpsPotentialIssuesinSimplestVMIModel9ConsolidationandLoadingCentWin-winsituationcanbeachievedforbothmanufacturers…PlanningandorderingcostsforthemanufacturergodownduetotheresponsibilitybeingshiftedtothevendorImprovedcustomerservice–vendorscanbetterrespondtocustomers’inventoryneedsintermsofbothquantityandlocationReduceddemanduncertainty–byconstantlymonitoringcustomers’inventoryanddemandstream,thenumberoflarge,unexpectedcustomerorderswilldwindle,ordisappearThemanufacturerismorefocusedthaneverinprovidinggoodserviceandtheoverallservicelevelisimprovedbyhavingtherightproductattherighttimeSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flow10Win-winsituationcanbeachie…andvendorsSmoothingdemand–thesupplierisabletosmooththepeaksandvalleysintheflowofgoods,andthereforetokeepsmallerbuffersofcapacityandinventory.Bettercoordination–thesupplierhasbetteropportunitiestoco-ordinatetheshipmentstodifferentcustomers,suchasscheduling-eitherpostponingoradvancing-shipmentsaccordingtoproductionschedules,customerinventorysituationsandtransportationcapacityReducedinventoryrequirements–byknowingexactlyhowmuchinventorythecustomeriscarrying,avendor’sowninventoryrequirementsarereducedsincetheneedforexcessstocktobufferagainstuncertaintyisreducedoreliminatedSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flowThebindingofcustomerstovendors–oncerelationshipisestablished,customerswillbereluctanttoenduretheamountofworkneededtoswitchvendors11…andvendorsSmoothingdemandCurrently,mostautomotivemanufacturersinChinaconsiderConsignmentInventoryasVMIVMIareusuallyusedasamethodtorealize“zeroinventory”–whilethepartsaresittinginmanufacturer’swarehouse,vendorsareforcedtofinishthetransferifpartsownershipuntilassemblyisdoneConsignmentInventory,ontheotherhand,aretheexactpracticeofmostvendorsandmanufacturers–vendorsarenotinvolvedininventoryandlogisticsdecisionsChallengesofVMIinChina12Currently,mostautomotivemanThisconcept/beliefrevealsthetransactionalrelationbetweensuppliersandmanufacturersPrice-drivensourcingdecisionwithoutin-depthunderstandingofcoststructureLogisticscostandmaterialcostarecommonlyaddedupasalump-sum“CIFprice”Fewsuppliersarewillingto“opencost”totheircustomersunlessmarginisverythinSupplychainmanagementtargetsforcefullydrivesupplierstoreducepricetomaintainbusinessrelationPaymenttermsandpaymentsituationconstrainsuppliersfromgettinginventoryinformationunderconsignmentinventoryInventorymovementmeansactualconsumptionofproducts,immediatelystartingthemanufacturerpaymentcycleNeithermanufacturersandsuppliersmakesignificantinvestmentinbuildingEDItofacilitatedatasharingWithouttransparentdatasharingandcollaborativesupplychainplanning,lose-losesituationarisesduetohigheroperation(transaction)cost13Thisconcept/beliefrevealsthToavoidthepotentialconflictbetweenmanufacturersandsuppliers,anindependentthirdpartycanbeemployedtohelpmanagetheVMIinitiativeThird-partyconsolidatestheshipmentfromvarioussuppliersThirdpartyfacilitatetheinformationexchangebetweenmanufacturer,consolidationandloadingcenter,andthesuppliersInformationisneutraltobothsuppliersandmanufacturers,signalingtransferofownershipaccordingtopre-agreedtermsThird-partycanhelpmanageinventory,unpacking,kitting,sequencinganddeliverytoline,milk-runningtheinboundpartsandpotentiallyplacingpurchaseorderonmanufacturers’andsuppliers’behalfOwnershipremainsunchangedbeforeorafterVMIisimplemented14ToavoidthepotentialconflicHowever,internalresistanceagainstoutsourcingtheVMIserviceremainsgenerallyverystrongNocommonunderstandingofhowthird-partycanhelpsmooththeVMIoperationStaffcurrentlyinchargeofinboundlogisticsareafraidoflosingjobsGeneralbelieftoholdpotential“profit”withinthecompanyNocostbenchmarktocomparetheoverallcostunderthird-partymanagementResistancetoshareinventorydatawiththird-partyAculturaladjustmentaswellasasignificantreorganizationofeverydayjobdutiesisrequiredtoaccomplishamajorchangeofcompanyoperationsVMIwillachieveitsacceptancegradually,especiallyaftertheanticipatedcompetitiveenvironmentin2-3years15However,internalresistanceaAChineseOEMoutsourceditsinboundlogisticstoChinaLogisticsforoperatingassets,skillsandbettermanagementOEM—InboundLogisticsTheOEMwaspreparingformassproductionofanewpassengercarmodelonatotallynewplantInthepast,thesupplierswereaskedtodeliverallcomponentstothelinesidewarehouseTherearenotenoughin-houseoperationstaffandspacetocopewithexpansionofproductionThemanagementoftheOEMwouldliketofocusonmanufacturingofvehicles,whileoutsourcemostofitslogisticstothirdpartyChinaLogisticsrefurbisheda4,500Sq.M.warehousesituated8kmfromtheassemblylineInaddition,emergencyorderscanbedispatchedwithintenminutesofnotificationanddeliveredtolinesidewithin30minutesPartsarestored,pickedandmarshalledaccordingtowheretheyareusedontheassemblyline,withloadsconfiguredindirect-to-lineorderScalerampedupfrom40unitsperdayinNovember2002to180unitsinMarch2003Inatypicalweek,theChinaLogisticsteamhandlesmorethan3,000differentproductlinesandmakessome250just-in-timedeliveriestolinesidereceivingpointsChinaLogistics’ApproachSituationSelectedCaseStudies16AChineseOEMoutsourceditsiThereareseveraldifferentfactorstoconsiderindesigninganappropriateinventorylevelOrder—to-deliveryleadtimeOrdersizeandfrequencyAnnualthroughputPerSKUdemandCompletevehiclesalesvolumeCarparc(penetrationrate)TotalnumberofSKUsKittingorotherneedsPurchasingleadtimeTransportationleadtimePurchasingordersizeandfrequencyCustomerNeedsVolumeForecastSKUComplexityInboundProcessSolutionSelectionTotalCostTransportationcostWarehousingcostLaborcostLevelofIntegrationSourceofmaterials(externalsuppliersorOEMfactory)LocationofsuppliersOEM—InboundLogistics17ThereareseveraldifferentfaCurrentOperationalCharacteristicsrelatedtoMaterialsManagement20+domesticand50+overseassuppliers

Supplier1Customerinvolving:LogisticsDeptQualityDeptPlanningDeptSupplierXSupplier2Supplier3Supplier22……Operationalcharacteristics:ComponentSupplier—InboundLogisticsAtpresent,CustomerXdirectlycontactamultitudeofsuppliers,toPlaceP/O;MonitorP/Ostatus,changeP/Oifnecessary;Receiveandunpackparts,storeandpickingInspectandsortparts;Delivertoassemblyline;Checkdocumentationandfinallypayinvoice.Itinvolvesfunctionsacrossthecustomer:ProductionPlanningQualityControlLogisticsandMaterialsManagementITFinance18CurrentOperationalCharacteriMajorcapacityandqualityissuesariseswhen50%annualgrowthisanticipatedUnder-capacityforwarehousingspaceThereareconstraintsasproductioncapacityneedstobeboomedtomeetincreasingcustomerdemandsManufacturingflexibilityislowWhenpartsorderedbeforearealreadyontheirwaywhileproductionplanneedstobechanged,eitherthepartshavetogobackortheproductionplanhastoremainunchangedsincethereisnospacefortheunwantedpartsWhenpartsreceivedarefounddefectedproductionhasnotbeenabletoswifttoalternativeplanasthereislittleotherstockinthefactoryQualityhasbeencompromised:Asthereislittlestockonhandsomepartswithdefectshavetoberepairedandused,hencequalityisnotatitsbestfromtimetotimeCommunicationsconsumeplentyoftimeEachfunctionmayhavetocontactsuppliersfortheirownresponsibilitiestoconductthepreviouslymentionedactivitiesmakingtheoperationlesssmoothComponentSupplier—InboundLogistics19MajorcapacityandqualityissProjectRoll-outScheduleContractnegotiation

Supplieragreementnegotiation

SetupGoliveJulyAugSeptMaintasksWarehousedecorationOfficeset-upWMSSystemfinetuningStafftrainingProcurementofequipmentsInternalSOPQualityinspectioncapabilitiesimprovementMaintasksPriceProcessSOPKPIMaintasksInventorylevelPriceandPaymentSOP&KPINegotiatingcontracts,i.e.warehouse,equipmentsetc.StartingrecruitmentMaintasksSOPinplaceStaffinplaceQualitycontrolprocedureinplaceITsysteminplaceFacilitiesandequipmentinplaceSeptComponentSupplier—InboundLogistics20ProjectRoll-outScheduleContrAutoLogisticsandSupplyChainManagementSummit2003ThePracticeofVMIinChina21AutoLogisticsandSupplyChainManAgendaOurunderstandingoftheautomotivelogisticsneedsWhatisVMI–definition,proceduresandbenefitsChallengesofVMIinChinaCasestudyBriefintroductiontoChinaLogisticsCompany22AgendaOurunderstandingoftheAnautomotiveOEM’slogisticsneedscoverbothinboundandoutboundoperationsofpartsandfinishedvehiclesPlantSuppliersConsolidationandLoadingCenterServicePartsDistributionCenterLogisticsforProductionPartsLogisticsforServicePartsLogisticsforCompleteVehiclesDealerDealer/ServiceStationBondedWarehouseforImportPartsOurunderstandingoftheautomotivelogisticsneeds23AnautomotiveOEM’slogisticsSupplychainmanagement(SCM)isthestrategicmanagementtoolthatcoordinatesthematerialandinformationflowsacrossthevaluechaintosupportadaptiveness

24Supplychainmanagement(SCM)“Demand-pull”valuechainrequiresthecompaniestobeflexibleandableto“control”alargepartortheentiresupplychainSuppliersManufacturingDemandindirectlydrivesmanufacturingvolumethroughforecastsWarehouseWholesale/Retail“Supply-push”LogisticsChainSuppliersB2BExchangeManufacturingDirectDelivery“Demand-pull”LogisticsChainManufacturingdrivenbyactualdemandTherateofsupplywassetbythemanufacturerinadvance,basedonexpecteddemandItwastheroleofthelogisticsproviderstoensureajust-in-timesupplyofcomponentsTherateofmanufactureisdeterminedonareal-timebasisbytherateofdemandWhilethismodelismoreefficient,itrequiresperfectintegrationofalllogisticsoperationswithinoneprocessSource:LehmanBrothers,A.T.KearneyAnalysis25“Demand-pull”valuechainrequThird-partylogisticsproviders(3PLs)candirectly,orthroughapartnernetwork,providearangeofservicesProcurementPayablesmanagementSupplierpaymentandconsolidatedinvoicingVendorperformancemonitoringandexceptionreportingJointprocessimprovementwithvendorsOverallfreightcoordinationFullloadtruckcarryingLess-than-loadtruckcarryingSmalllot(lessthan150pounds)carryingOrderconsolidationDeliveryschedulingExpeditingspecial/rushordersReturningandreprocessingundeliverableordersDeliverytracingPerformanceandexceptionmonitoringandreportingOverallinventorymanagementOptimizingsupplierorderschedulesOptimizingdealerorderschedulesCertificationofincomingshipmentsBarcodingPerformanceandexceptionmonitoringandreportingTrackingandReportingSystemsaccessibleviaInternetMaterialResourcePlanningOrderpreparation/assembly/consolidationSourcingofpackagingmaterialsPrintingofcorrugateand/orlinerboardmaterialsLabelingShrinkwrappingofcasesandpalletsFreightandDistributionCoordinationWarehousingandInventoryManagementMinorAssemblyandPackagingProcurement26Third-partylogisticsproviderDifferencebetweentraditionalbusinessmodelandVMImodelTraditionalVMIPurchaseOrderPlacementWhenacustomerneedsproduct,theyplaceanorderagainstamanufacturer.UnderVMI,thevendorgeneratestheorder,notthecustomer.InventoryTransparencyOnlyorderistransmittedtosupplierwhenproductisneeded.Thevendorcanviewthe“real-time”stocklevelofeveryitemthatthecustomercarriesaswellastruepointofconsumptiondata.InventoryReplenishmentThecustomerisintotalcontrolofthetimingandsizeoftheorderbeingplaced.Thevendorisintotalcontrolofthetimingandsizeoftheorderbeingplaced.InventoryPlanThecustomermaintainstheinventoryplan.Thevendorisresponsibleforcreatingandmaintainingtheinventoryplan.27DifferencebetweentraditionalSimplestVMIworkflowManufacturerSuppliers2341Themanufacturerapprovesthepurchasingtermswithsuppliers,includingthecommonlyagreedinventoryresponsibilityandmaintenancescheme.Themanufacturersendsproductactivitydatatothesupplier.Thisproductactivityisbasedonwarehousemovementofproductconsumedattheassemblylinelevel.Basedontheagreedinventorymaintenancescheme,thesupplieredits,approvesandreleasesthesuggestedpurchaseorder.Themanufacturerapprovesthispurchaseorderandsendittothesupplier.28SimplestVMIworkflowManufactuConsolidationandLoadingCenteriscommonlyusedtoreducethecomplexityincoordinatingmultiplevendorsQualityofdeliveryservicesfromvendorstoline-sidemightbedifferentVendors’shippingvolumemightbeverysmallgivenmorefrequent“demand-pull”ordersVendorsmightneedalargeline-sidebuffertocompriseafull-truckloadandmake-upasafetystockLargeline-sideareaisneededtoaccomplishunpacking,kitting,andpossiblysequencingofpartsbeforefeedingtoassemblylineIndividualvendorsmightrentwarehousesforthemselves,withlimitedscaletosharewithothervendorsConsistentdeliveryservicetoline-sideOptimalshippingvolumetoreducetransportationcostandinventorycostReducedrequirementonline-sidewarehousespaceCoordinationbetweensuppliersandproductionlinepossibletopromotesynchronizationandJITHowConsolidationandLoadingCenterApproachHelpsPotentialIssuesinSimplestVMIModel29ConsolidationandLoadingCentWin-winsituationcanbeachievedforbothmanufacturers…PlanningandorderingcostsforthemanufacturergodownduetotheresponsibilitybeingshiftedtothevendorImprovedcustomerservice–vendorscanbetterrespondtocustomers’inventoryneedsintermsofbothquantityandlocationReduceddemanduncertainty–byconstantlymonitoringcustomers’inventoryanddemandstream,thenumberoflarge,unexpectedcustomerorderswilldwindle,ordisappearThemanufacturerismorefocusedthaneverinprovidinggoodserviceandtheoverallservicelevelisimprovedbyhavingtherightproductattherighttimeSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flow30Win-winsituationcanbeachie…andvendorsSmoothingdemand–thesupplierisabletosmooththepeaksandvalleysintheflowofgoods,andthereforetokeepsmallerbuffersofcapacityandinventory.Bettercoordination–thesupplierhasbetteropportunitiestoco-ordinatetheshipmentstodifferentcustomers,suchasscheduling-eitherpostponingoradvancing-shipmentsaccordingtoproductionschedules,customerinventorysituationsandtransportationcapacityReducedinventoryrequirements–byknowingexactlyhowmuchinventorythecustomeriscarrying,avendor’sowninventoryrequirementsarereducedsincetheneedforexcessstocktobufferagainstuncertaintyisreducedoreliminatedSpeedandaccuracyofdataprocessingareimprovedduetocomputer-to-computercommunicationsReducedtotallogisticscostandimprovedcash-flowThebindingofcustomerstovendors–oncerelationshipisestablished,customerswillbereluctanttoenduretheamountofworkneededtoswitchvendors31…andvendorsSmoothingdemandCurrently,mostautomotivemanufacturersinChinaconsiderConsignmentInventoryasVMIVMIareusuallyusedasamethodtorealize“zeroinventory”–whilethepartsaresittinginmanufacturer’swarehouse,vendorsareforcedtofinishthetransferifpartsownershipuntilassemblyisdoneConsignmentInventory,ontheotherhand,aretheexactpracticeofmostvendorsandmanufacturers–vendorsarenotinvolvedininventoryandlogisticsdecisionsChallengesofVMIinChina32Currently,mostautomotivemanThisconcept/beliefrevealsthetransactionalrelationbetweensuppliersandmanufacturersPrice-drivensourcingdecisionwithoutin-depthunderstandingofcoststructureLogisticscostandmaterialcostarecommonlyaddedupasalump-sum“CIFprice”Fewsuppliersarewillingto“opencost”totheircustomersunlessmarginisverythinSupplychainmanagementtargetsforcefullydrivesupplierstoreducepricetomaintainbusinessrelationPaymenttermsandpaymentsituationconstrainsuppliersfromgettinginventoryinformationunderconsignmentinventoryInventorymovementmeansactualconsumptionofproducts,immediatelystartingthemanufacturerpaymentcycleNeithermanufacturersandsuppliersmakesignificantinvestmentinbuildingEDItofacilitatedatasharingWithouttransparentdatasharingandcollaborativesupplychainplanning,lose-losesituationarisesduetohigheroperation(transaction)cost33Thisconcept/beliefrevealsthToavoidthepotentialconflictbetweenmanufacturersandsuppliers,anindependentthirdpartycanbeemployedtohelpmanagetheVMIinitiativeThird-partyconsolidatestheshipmentfromvarioussuppliersThirdpartyfacilitatetheinformationexchangebetweenmanufacturer,consolidationandloadingcenter,andthesuppliersInformationisneutraltobothsuppliersandmanufacturers,signalingtransferofownershipaccordingtopre-agreedtermsThird-partycanhelpmanageinventory,unpacking,kitting,sequencinganddeliverytoline,milk-runningtheinboundpartsandpotentiallyplacingpurchaseorderonmanufacturers’andsuppliers’behalfOwnershipremainsunchangedbeforeorafterVMIisimplemented34ToavoidthepotentialconflicHowever,internalresistanceagainstoutsourcingtheVMIserviceremainsgenerallyverystrongNocommonunderstandingofhowthird-partycanhelpsmooththeVMIoperationStaffcurrentlyinchargeofinboundlogisticsareafraidoflosingjobsGeneralbelieftoholdpotential“profit”withinthecompanyNocostbenchmarktocomparetheoverallcostunderthird-partymanagementResistancetoshareinventorydatawiththird-partyAculturaladjustmentaswellasasignificantreorganizationofeverydayjobdutiesisrequiredtoaccomplishamajorchangeofcompanyoperationsVMIwillachieveitsacceptancegradually,especiallyaftertheanticipatedcompetitiveenvironmentin2-3years35However,internalresistanceaAChineseOEMoutsourceditsinboundlogisticstoChinaLogisticsforoperatingassets,skillsandbettermanagementOEM—InboundLogisticsTheOEMwaspreparingformassproductionofanewpassengercarmodelonatotallynewplantInthepast,thesupplierswereaskedtodeliverallcomponentstothelinesidewarehouseTherearenotenoughin-houseoperationstaffandspacetocopewithexpansionofproductionThemanagementoftheOEMwouldliketofocusonmanufacturingofvehicles,whileoutsourcemostofitslogisticstothirdpartyChinaLogisticsrefurbisheda4,500Sq.M.warehousesituated8kmfromtheassemblylineInaddition,emergencyorderscanbedispatchedwithintenminutesofnotificationanddeliveredtolinesidewithin30minutesPartsarestored,pickedandmarshalledaccordingtowheretheyareusedontheassemblyline,withloadsconfiguredindirect-to-lineorderScalerampedupfrom40unitsperdayinNovember2002to180unitsinMarch2003Inatypicalweek,theChinaLogisticsteamhandlesmorethan3,000differentproductlinesandmakessome250just-in-timedeliveriestolinesidereceivingpointsChinaLogistics’ApproachSituationSelectedCaseStudies36AChineseOEMoutsourceditsiThereareseveraldifferentfactorstoconsiderindesigninganappropriateinventorylevelOrder—to-deliveryleadtimeOrdersizeandfrequencyAnnualthroughputPerSKUdema