Automobile logistics solution for a strong inbound supply chain moves global goods flows for Ford of Europe
Cologne, December 4, 2018 – CHEP Automotive and Industrial Solutions has won one of the prestigious Automotive Global Awards for the third year running. This year CHEP Automotive was recognized in the category “Supply Chain Solutions” with a pioneering solution for a global inbound supply chain of the car manufacturer Ford of Europe. The category acknowledges the implementation of outstanding supply chain concepts that improve supply chain efficiency and create the conditions for further efficiencies in the future.
CHEP Automotive worked in close cooperation with Ford of Europe. The supply chain expert developed and implemented an intercontinental flow solution that can be expanded worldwide for both Ford and Ford of Europe suppliers. The new logistics process is characterized by better utilization of the supply chain and is also sustainable in that reusable packaging has been introduced, thus avoiding waste.
Variety of intercontinental flows of goods on a global scale
The winning solution from CHEP demonstrates the ambitious implementation of an inbound global supply chain for Ford of Europe, featuring product flows from South Africa and the US to Europe and back. Plans are to extend these to other locations such as Thailand, China and South Korea. Previously, Ford of Europe used disposable packaging for its intercontinental flows. Each supplier of Ford had developed specific and often unique corrugated packaging to supply its components to OEM (original equipment manufacturer) factories. All of these packages were removed from the production line at the OEM plants and thrown away. This resulted in large amounts of waste, which took up a lot of space inside and outside the plant and also had a significant negative impact on the environment. The introduction of the CHEP reusable packaging (IsoBin container) provided the opportunity to standardize packaging, reduce space requirements and drastically reduce waste. This container is specially optimized for sea freight – for fewer inefficiencies in the logistics chain and optimal protection of expensive car parts.
The use of the global network of CHEP service centers results in positive economies of scale: the packaging is provided at the place of origin (supplier) and then picked up at the destination (Ford of Europe). With the implementation of all intercontinental flows for Ford of Europe by 2021, IsoBin movements are expected to reach around 185,000 per year worldwide. CHEP’s Share and Reuse model of Circular Economy leverages assets across industries and supply chains to provide a first-class alternative to disposable packaging. The IsoBins are owned by CHEP and are fully maintained by CHEP. The broad spectrum of parts to be transported are mainly large, high-quality parts such as gears, catalytic converters and wiring harnesses. This allows Ford to not tie up capital for their own containers and to achieve significant savings by working with CHEP.
“Intercontinental shipments are part of our daily incoming flows,” comments Kuly Malka, Chief Engineer, Material Flow & Packaging Engineering, Ford of Europe. “There is a high risk associated with individual, global flows of goods. Not only are we talking about the high in-transit value associated with a difficult-to-access supply chain, but also the risk of damaged parts due to poor packaging. The cost of subsequent deliveries and eventual freight incidents can severely affect the assembly plans and the result. CHEP not only takes over the ownership risk of the containers, but also manages them through its proven asset control systems. It gives me and the team peace of mind that we focus on what we do best – build cars!”
“An efficient and cost effective supply chain is a clear competitive advantage,” adds Murray Gilder, vice president of Automotive and Industrial Solutions EMEA at CHEP. “By outsourcing the entire packaging management process and sharing reusable packaging within our worldwide network, global supply chain companies save time, money, and the expense of managing one-way packaging or their own pool of containers. We are delighted that our unique sharing concept has once again been honored by the Automotive Global Awards this year.”