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Wissmann: Automotive production logistics is major recipe for success

München/Berlin, 25 January 2013

“Today the German automotive industry works in highly complex production networks spanning the globe. Automotive production logistics – that is, the punctual supply of assembly lines with all the necessary parts – is a prerequisite for a smoothly functioning value-added chain for manufacturers and suppliers alike. One reason the German automotive industry is so successful on the international markets is that it masters the global complexity of production with finely tuned logistics,” stressed Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was speaking at the start of the Automotive Logistics Forum, which the VDA organised in cooperation with the German Logistics Association (BVL) in Munich. “Last year foreign production by German passenger car makers rose to 7.7 million new cars. Then we also had 5.4 million cars built at home. The production networks of the German automotive industry are therefore becoming ever more global and more interlinked,” Wissmann said. Parts and components for a vehicle often came from different continents, and were delivered directly to the production lines by the suppliers just-in-time and frequently also just-in-sequence. “Mastering this complex system is the task of production logistics,” Wissmann explained.

Every day the experts involved face a number of challenges in ensuring smooth production. “It is therefore crucial to recognise problems in the supply chain rapidly and to find solutions. This requires intensive communication between manufacturers, suppliers and logistical service providers,” the VDA president underlined. In response to the increasing risks, he added, the companies had established early warning systems. “The continual developments and optimisations in the logistics processes are having an effect. Even in difficult times, the complicated supply chains prove to be stable,” Wissmann emphasised.

The two-day Automotive Logistics Forum is being organised in 2013 for the first time as a joint event by the VDA and the BVL. Around 500 logistics experts from the German automotive industry are meeting in Munich to discuss the challenges in their industry.

The management of complexity and risk will become the core competence of the automotive industry, Wissmann said. The stability of the supply chain, he continued, was however due not only to successful risk management. “A decisive factor is now, and will be in the future, above-average willingness of all those involved to work hard, especially on the part of the logistics staff at the suppliers. It is the suppliers who bear the main burden within the supply chain. They are therefore crucial to the overall success of a stable logistics process.”

Wissmann also spoke about the field trial with long trucks, which has been running for roughly one year now: “The field trial is working; it is proving to be a success.” Following a start-up phase at the beginning of the field trial, the number of participating companies has risen continually over recent months. The approved network is due to be expanded again soon. “We assume that at that time additional firms will join the field trial,” Wissmann said. The initial experience was all positive, he added. For example, hauliers were reporting savings in fuel and CO2 of up to 30 per cent. Wissmann continued, “The field trial has already brought about CO2 savings of several hundred tonnes. The long truck is thus proving to be a genuine eco truck.” He went on to say that the long truck had long since refuted its critics’ arguments in the practical test.

In addition to the need to make more use of long trucks, Wissmann called for needs-driven development of the infrastructure. Road freight traffic alone in Germany would grow by more than half up to the year 2025, he said, adding: “Today’s investments in the traffic network are nowhere near sufficient to cope with this growth. This applies equally to all modes of transport – inland waterways, railways and the roads.” Transport routes were essential to Germany as a logistics location. In its turn logistics was Germany’s foundation as an economic and industrial location. “Germany is one of the most successful logistics nations in the world. It takes one of the top places in the logistics ranking of the World Bank.” There was hardly any other country that was as strongly integrated into the global economy as Germany, with its foreign trade quota of over 75 per cent. “Therefore everything must be done to maintain and expand the necessary infrastructure,” the VDA president underlined.

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