+++ The Automotive Logistics Europe 2009 conference has taken place +++
Automotive Logistics Europe was held for the seventh time from March 3 to 5 2009 at the Montreux Palace, Montreux, Switzerland.
Key senior automotive logistics executives gathered to debate the key issues facing the European logistics arena, exploring solutions to overcome the obstacles often found within the industry, with an emphasis on promoting networking and collaboration.
Many delegates have testified that they found the Automotive Logistics Europe conference beneficial, interesting and enjoyable.
We are still confirming dates and venues for next year and will make a decision soon after carefully evaluating the feedback from this year's conference.
In the meantime, if you would like us to keep you updated about our conferences, please click here.
2009 Conference report
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Heavy criticism of car-makers at Automotive Logistics Europe 2009
MONTREUX, SWITZERLAND - A lack of communication from carmakers as well as poor visibility in the supply chain is damaging logistics providers and suppliers as they struggle through the downturn. Meanwhile, the growth in car sales and global production prior to the recession has created lengthy, complex supply chains that, in some cases, have become unsustainable.
These were some of messages to emerge from the Automotive Logistics Europe conference last week, where nearly 200 delegates from the European automotive logistics industry gathered. They included executives from OEMs such as Ford, Renault-Nissan, and Audi, as well as tier one suppliers and logistics service providers of all kinds.
Transport providers and suppliers criticised OEMs for not being more transparent as the financial crisis decimated vehicle sales. According to Vega's Franz Blum, even when commercial vehicle sales had dropped from 26,000 to just 600 in one month, providers were not informed. "The word 'partnership' is ridiculous," he said. "It's a sunshine friendship. There is no communication left with the manufacturer."
Manuel Formis, from tier-one supplier Honeywell, said that while carmakers were delaying new model launches, they did not always communicate that along the supply chain, leaving suppliers producing or shipping parts needlessly. Collaborative logistics with other tier suppliers in order to reduce cost was not the answer - "we've tried it and it doesn't work," said Formis, and added that logistics cost must become 100% variable in line with demand, not 70% variable as now.
To achieve this, manufacturers and providers will have to become more responsive, and increase communication in the supply chain, whether to react better to demand or to mitigate the risk of suppliers on the brink of collapse. Michael Druml, from contract manufacturer Magna Steyr, said that his team was doing this, though he was most worried about the implication of suppliers going into receivership. "In that case, an official receiver could come in, increase prices 80% and change the payment terms to cash on delivery," he said. "I'm not even sure our IT systems could handle such a transaction."
Cary VandenAvond, from IT supplier i2, presented research indicating that manufacturers will look to shorten and re-engineer their supply chains, which were often created by chance rather than design as companies expanded. Hauke Harnisch, who recently left Lear to start DualproLOG, said that while he didn't expect low-cost sourcing to end, in Europe there would be less focus on Asia and more on Eastern Europe.
However, there are still positive projects being undertaken by carmakers. Kevin Wall from Jaguar Land Rover described how his company had successfully outsourced logistics to DHL Exel in the past two years. And Anne Laure Mirabaud described how Renault had lowered inventory this year and improved cash flow by synchronising logistics and production, by being more disciplined in forecasts and schedules, and by improving in-plant logistics.
But her colleague from the Renault Nissan purchasing organisation, Dominique Monteux, revealed that when container shipping rates were high, she was rebuffed by carriers when attempting to seek long-term agreements on price. So market-based commodity pricing was now working in their favour.
There do remain other opportunities in the market. Speakers from Russian Transport Lines and OMG were bullish on the outlook for Russia, while IT systems, though a difficult investment, remain in demand since many manufacturers and providers have seen first-hand the high cost of a lack of visibility. Inform's Matthias Berlit noted fresh approaches from places like from India and Taiwan.
There is also opportunity for buyers of distressed assets. John Merry of Quantum Automotive said that his new company was looking to return to finished vehicle logistics. "There are a lot of distressed assets around, and there are significant opportunities if you take the long term view," he said. However, he believed structural change was needed. "I don't believe the high asset model is the right one. You can't invest in 10-year life assets on the basis of one-year's contract."
Finally, the aftermarket logistics for spare parts is still profitable. Ceva's Bruno Sidler observed that its high margins have been a "ray of light" for the industry.
Automotive Logistics Europe is one of a series of conferences organised worldwide by Automotive Logistics magazine, and its sister title Finished Vehicle Logistics. Future events in the series are in Shanghai in April, in Sao Paulo, Brazil in May, in Moscow in June, in Detroit in September and in India in December.
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