Automotive Industry and Markets

Logistics

Transparency and control of logistics processes in current conditions demands a growing, global exchange of information between suppliers, manufacturers and service providers.

Topics of Logistics in the Automobile Industry

The global production network of the German automotive industry depends upon the supply chains being reliable and safely organized. Vendor components must be delivered quickly, securely, economically and in an environmentally friendly fashion, to production plants. Also, finished vehicles must reach their customers in all regions of the world. For this purpose, complex production networks involve the participation of numerous partners. Major challenges for automotive logistics are globalization and security, facing terrorism and crime. 

Modern logistics networks must optimally bring together local raw materials and global supply. It must be able to react flexibly to fluctuating demands as well as to geographical and political risks. The costs should not get out of hand. Therefore, the decisive factor is the permanent improvement of the logistics processes. Above all, this entails the optimization of the flow of information between manufacturers, suppliers and logistics service providers. To put this into practice, the VDA seeks to further harmonize the interfaces over which data are transmitted. Another focus of VDA Logistics is to form systems with which supply chains can be monitored digitally. Parts and supplies are already equipped with RFID tags (Radio Frequency Identification) and can continuously transmit their location. The VDA recommendations on the use of RFID have been completely revised, and now provide the latest knowledge and experience. In addition, global recommendations were developed jointly with international partner organizations. 

The horizontal integration of the supply chain and the integration of all partners in the value chain, from raw material suppliers to the automobile manufacturers and from distribution to the supply of spare parts, is currently gaining in importance to automotive logistics. In particular, the number of different partners and the complexity have grown rapidly. The supply chains have grown longer, and the transport volume and value of the transported goods have increased. This is partly due to the wider variety of automobile models, but also due to the rapid expansion of overseas production on all continents. 

In order to manage and control these networks, accurate, comprehensive and fast information is crucial. It no longer simply involves the beginning and end of a process, for example, the date of goods shipping and receiving. Instead, companies want to have the highest possible transparency throughout the entire order and delivery process. This is because only this level of transparency makes it possible to refine the controls in order to react to disruptions and to coordinate logistics processes in finer detail. To achieve this goal, the physical objects in the supply chain – from the container ships down to the smallest shipping container – must be networked. You will allow their location and status to be continuously reported. From the information details, logisticians can systematically put together a picture of the condition of the entire supply chain. 

As part of this development, IT systems are opened and diverse objects are linked to each other, so that an “Internet of Things” is formed – often described by the phrase Industry 4.0. However, there are certain risks associated with this. To protect the automotive supply chain against cybercrime, the VDA has developed secure transmission and encryption protocols. 

Digital systems are no longer relevant only in the control of logistics processes. Even the planning of new factories is largely digitized. For example, 3D visualization and logistics simulations are used. Thus, production and logistics processes can be virtually planned today in the “Digital Factory,” and tested and optimized, before a single spade is turned.

Werner Mock
Werner Mock Head of Department Logistics

Tel: +49 30 897842-222 Fax: +49 30 897842-600
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