Since it takes tens of thousands of materials and parts to manufacture a vehicle, inbound logistics requires well-planned processes. This white paper takes a look at an overview and features of automotive logistics with a focus on inbound logistics service Samsung SDS provides to its customer and a series of activities Samsung SDS has carried out to innovate logistics operation.
Overview of Automotive Logistics
Automotive logistics can largely be classified into three areas – inbound logistics, production logistics and outbound logistics.
Inbound logistics refers to logistics activities of procuring materials, parts from suppliers all over the world and transporting them to warehouses/X-Dock or production lines on time. Here, materials can be divided into imported ones procured via international transportation (air or sea) and local materials produced by local parts suppliers.
Production logistics involves manufacturing automotive engines and finished vehicles with procured auto parts, packaging semi-processed items for KD export and managing spare parts.
Lastly, outbound logistics is related to carrying finished vehicles to the domestic and overseas markets, exporting packaged KD units and distributing spare parts to aftermarket centers.
Features of Inbound Logistics in the Auto Industry
It is inbound logistics where logistics management and operation begin as it deals with how to pack and divide materials/parts in units and how to deliver them to warehouses/production lines on time. Since it takes tens of thousands of materials and parts to manufacture a vehicle, inbound logistics requires well-planned processes.
In order to run inbound logistics smoothly, it is important to ensure a stable supply of parts from suppliers and optimize transport routes as well as truck rotation and load efficiency. And this requires an extensive understanding in each transport type (DT1)/MR2)/ST3)) in inbound logistics and an accurate analysis of each route.
1) DT: Direct transport is shipping materials from a single vendor directly to a plant
2) MR: Milk Run is a delivery method where a vehicle visits each parts supplier in the vicinity and picks up deliveries to transport them to a material storage warehouse.
3) ST: Shuttle transport is delivering materials between warehouse-plant, warehouse-warehouse or plant-plant at a designated time.
It’s also necessary to secure enough space for material storage in a warehouse and develop a layout for optimal warehouse management, including efficient in/out of materials and inventory management.
An Innovation Case in Inbound Logistics
In 2017, after months of process development and system stabilization, Samsung SDS started working as LLP4) for Company A, a leading global auto manufacturer and KD5) exporter, and it has been successfully playing the role so far.
4) LLP (Lead Logistics Provider): A LLP, also referred to as a 4th party logistics provider (4PL), offers not just 3PL services but also comprehensive logistics service, using its expertise in IT and consulting.
5) KD (Knock Down): Manufacturing parts needed to assemble a product and exporting them to another country or a region for final assembly
One of the major benefits our logistics service provides is that we innovate to make our customer’s logistics competitive which in turn increases their manufacturing quality. With our integrated logistics platform Cello, we manage all areas of logistics from supply chain planning to logistics execution.
To find out more about inbound logistics for automotive industry and innovation case of Samsung SDS, visit Cellologistics.com and download the white paper.