Friday, 15 August 2014

What are the Nine Pain-Points in the Automotive Industry and How to cope with it – Part Two

Today, we continue with the remaining automotive industry pain points:

Delays in the order processes and schedulingWhen the order is in the order bank it has to remain there for another 8 days so the real orders have time to come in and be matched up with the orders. The manufacturer also has to consider the order priorities along with the constraints relating to labour and the factory to create a production schedule that is feasible.  The total time of delays in the order process is 30.4 days when taking into account the days in scheduling and sequencing.

Delay from distribution Further delays are caused from the distribution standpoint, adding a further ten days on average. The vehicle has to wait before it’s loaded on to be transported and then almost 4 more days while it’s on route to the dealer. However, it only takes 24 hours to be transported but the non-value added activities take 9 days.

High inbound and outbound logistic costsInbound logistics have high costs, equaling around 10% of the whole manufacturing plant’s costs. This is because the supplier s send out many different components and parts and the other is because the assembly plants need lots of smaller deliveries that are more frequent.

 Product proliferationThe final pain point is the product proliferation. The automotive industry has counteracted the low rates of expansion by increasing their ranges in order to increase the interest of the buyers. They have done this regardless of the increased costs caused by increased production and the increased contents and parts plus inventory costs.

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