Alex Kreetzer and OBS Logistics CEO Dave Renshaw explore the advantages of innovative supply chain technology, such as the software provider’s CALIDUS portal.
The automotive supply chain has seen substantial change in the past decade, with technology growing evermore present. Systems have simplified operations, eliminating the need for paper, breaking down language barriers and improving overall efficiency. This larger scope of visibility has allowed automakers to keep up to date with their transportation operations; able to communicate with logistics providers and respond to issues in a matter of minutes. This has improved transit times tenfold, allowing a uniform supply chain for suppliers, third party logistics providers (3PL), logistics companies and OEMs, significantly reducing common issues such as damage, late deliveries and warehouse management complications. The automotive industry is finally starting to embrace this influx of technology, however it is still failing to extract the most out of it. This may be down to a lack of knowledge, or merely the fact that these companies are not realising the potential that is at their fingertips.
Software suppliers that specialise in integrated transport and warehouse management technology can help improve supply chain operations for a range of customers, such as 3PLs, OEMs, suppliers and other companies with complex logistics operations. These businesses have the expertise to assist automotive customers, taking over their systems or bolting on to their existing frameworks, designing tailored software for different business structures and formatting it to a range of executives on a number of devices. Now, more than ever, executives are on the move and they have little time to turn on a computer and wait for the system to load. They want to be notified when a delivery is complete or, more importantly, when there is an issue. Time is money.
OBS Logistics CEO, and a driving force of the CALIDUS portal, Dave Renshaw believes that this kind of software can completely revamp a business’s logistics network and draw great rewards in the long-run, embracing supply chain software and eliminating outdated processes that hold back operations. “By having this broad scope, we can touch on various aspects of the automotive industry through a range of different aspects,” he says. “We provide enterprise resource planning systems on which a component manufacturer will run their business, containing specialist modules within it that are geared up to interact with the automotive manufacturer. One example of this is dealing with simple actions like making sure that parts are labelled properly so that they are ready for processing once the manufacturer receives them.” Software development companies like OBS Logistics cover all aspects of movement through the supply chain, from warehouse management of components to the transportation of parts and vehicles, monitoring the entire process. This eliminates the need for companies to have multiple systems that screen each step of the process, simplifying overcomplicated operations. Simplicity is key for a business to succeed in modern logistics.
Software providers realise that automotive customers are seeking compliance through their processes, which means that they must cooperate with them in order to implement the systems the way they want to do it. This is also the case for business partnerships, where suppliers must refigure their operations to cater for an automaker’s demands. “If you want to be a component manufacturer to a large OEM, you need to comply with the way they want to do it,” stresses Renshaw. “Every single business plan is completely different. A lot of OEMs want either themselves or their chosen outsource partner to get efficiency, accuracy and cost-savings into their logistics operations. We must also do this and so we have introduced a flexible logistics system that provides parts distribution to the dealers for such things as aftermarket services and repairs.” The systems are used to process parts orders for the dealerships, which does not just improve accuracy and efficiency, but deals with the things in the background such as tracking the containers before and during transit.
The automotive aftermarket sector will significantly benefit from flexible software like this, as there has not been any systems in the past that can deal with such unpredictable business frameworks. Renshaw tells me that the “automotive aftermarket is interesting, as manufacturers are looking to apply this technology to their businesses, which is different to other supply chain operations; a typical order cycle takes around 45 minutes from an order request to garage delivery.” This kind of logistics requires very rapid distribution and it is a completely different challenge, however a portal like CALIDUS is flexible and geared up to cater for this kind of process.
Third eye integration
In addition to warehouse management and transport management, technology within the supply chain has introduced such innovations as electronic proof of delivery (EPOD), which is being integrated into more and more business frameworks. This does not just eliminate the use of paper, but also notifies the customer on their device when the transport process has been completed. This means that an executive can follow the entire process of the delivery wherever they are, from a vehicle or component in storage right up to its final destination. This emphasises the importance of end-to-end supply chain visibility, one of the most important factors in logistics. Throughout the transport process, an automotive customer must be able to enter orders, locate and find available parts while placing orders and tracking delivery, including the estimated time of arrival. This eliminates delays and significantly reduces process time, keeping all parties happy wherever they are in the world. “Customers now know when the vehicles are on their way, using the portal to know what time the delivery will meet each checkpoint before reaching its final destination,” adds Renshaw. “This kind of visibility is key in modern logistics, and it is changing the perceptions of many in the industry.” Executives get what they want, when they want it.
In addition, logistics clients can utilise these portals by allowing their business partners to enter and track their own orders, which can also significantly reduce admin costs. This process may seem strange, as many believe that they should not be the ones using the portal as they are a paying customer who wants it done by someone else. However, as Renshaw explains to me, “once they adopt this software you cannot get them off it, as they realise the benefits of receiving up-to-date information at their fingertips, rather than having to make lots of calls to customers and service teams. This ultimately simplifies the entire operation.” One of the biggest needs for transport providers is having up-to-date information that can allow them to plan ahead, as they can only plan based on the data they have. These companies can utilise the software to plan up-to-the-minute information by getting their customers to pre-label the goods before collection. Renshaw tells me that this allows the item to be scanned throughout the transport process, improving both efficiency and accuracy. “We are not only seeing portals being used to enter order, track them and look at inventory, but to improve the accuracy and efficiency of supply chain movements.” By integrating this technology and improving visibility for logistics providers, OEMs and component suppliers, we will see a new level of the automotive logistics that will change outdated transportation processes.
However, data is a sensitive subject for large businesses, who tend to be overprotective of their existing systems, especially with current partnerships. To overcome this, software providers must find a solution that harmonises the technology with existing frameworks, as OBS’s CALIDUS has done. “Telematics equipment in vehicles holds pretty valuable information and we must integrate with companies like TomTom for example, who provide in-cab technology,” he says. “We have a very open interface that is able to pick up and deal with information from systems used by the manufacturers, suppliers and software found within the vehicles. This is fundamentally a supply chain visibility tool, which gives you all these feeds of information in one place.”
Supply chain insurance
This kind of software is extremely reliable, however there is no way of completely eliminating accidents and delays inevitably found down the spine of the supply chain.
Issues such as dwell times in ports and delays on rail can have detrimental effects on a company’s logistics operations, and this software is able to reduce these risks and protect business frameworks. It is extremely important for software providers to ensure this level of reliability and safety for high-end businesses, as they could lose millions of dollars or lose long-term contracts from such a set back. On such an international scale, companies also need to be prepared for a range of environments and cultures that can interrupt their supply chain, with countless time zones and languages that can, believe it or not, still cause communication troubles. “Where you can usually move most things on one mode of transport in countries like the UK, you may have to use a range of transport such as rail or even air across a number of other regions,” Renshaw adds. “There is now, finally, a solution for these problems. CALIDUS is able to schedule a number of journeys with different modes of transport and journey legs.” This again illustrates the importance of communication and visibility within the supply chain as the software can allow, for example, an automaker from the US to contact his logistics partner in the Middle East and his supplier in Europe. Through this innovation, we could start to see joint-ventures and business agreements between companies that would have never have considered each other before, as the global automotive supply chain strengthens its links through technology.
In addition to overcoming the issues found within a customer’s operations, software suppliers must ensure that, although extremely reliable, their systems remain online continuously. A system shutdown or glitch could ‘blind’ the parties involved, which would risk losing track of deliveries and items stored in warehouses across the world. Renshaw stresses that, “managing services such as risk and damage identification must have automatic disaster recovery in order to provide security. We recognise that we are running business-critical applications and, if a processor does go down, we will always have another one to take over within a matter of minutes.” This is a common concern for most businesses, though modern technology like CALIDUS has become so advanced that problems like this are extremely rare. By integrating managing services, companies can also get a predictability of cost, knowing how much the system will cost to run in upcoming years. “This is important,” affirms Renshaw, “the shape and size of companies will change over time, so this is often key to cost reduction, improved services and improve risk management, on top of predictability.”
Embracing the future
Embracing this technology is vital, as you are now able to see data when and where you want it. More and more these days, executives are on the move constantly and they are hardly ever sat at their desks for extended periods. By utilising portable devices such as mobile phones and tablets, executives have ongoing visibility. OBS’s software is taking business intelligence to the next level, providing them with the information that they need to look at. “This technology distills all the information out, and picks out the one piece that you need. You do not need to know about the 99% of your business that is working fine, you only want to know of any issues,” Renshaw confirms. “This applies in all aspects of an automotive business, from the Procurement Directors looking at budgets, Logistics Directors identifying a vehicle that has broken down or Finance Directors who are analysing payments. It can be a whole host of alerts and information provision geared up to an individual’s role.” More than anything else, this software has to be configurable as no two executives work the same way or off of the same information.
“Software has to develop like everything else in the living, breathing automotive industry and there is a gap in the market for this kind of this technology. There is tremendous excitement about technology like this from the entire industry.” Once businesses welcome in this software, the automotive industry will start to wonder why it ever doubted supply chain technology and question how it ever operated without it.