Drive moving "from China Price to World Class"

Shanghai 23 March 2009 (Automotive Logistics) Boosting performance rather than cutting price is the major challenge facing the automotive logistics sector in China, according to key executives in the sector. Car-makers are increasingly anxious that rising labour costs and increasing competition in the domestic market mean that logistics efficiency must be dramatically improved.

"From China Price to World Class" is the theme of this year's principal gathering of logistics professionals, who will be at the Automotive Logistics Conference in Shanghai from 20-22 April.

Logistics management including Dr Feng Junxia of FAW, George Ho of Geely, Jack Cheng of Fiat and Cliff Chen of BMW will be present, along with outward facing supply chain directors including Carroll Pickett of Ford and Jeffrey Richards of Delphi.

Improvements in China start with visibility and planning in the supply chain. "A common phrase in China regarding shipping quantities is that 'it is close enough' to the requested level," says Karl Neumaier, director of Asia Pacific supply chain management for Visteon, a major Tier One company. "A supplier says that it has shipped 150 units, but 148 arrive. In North America the supplier could be disqualified for this type of service."

He and other senior figures in the sector was speaking to Automotive Logistics magazine, which is organising the conference

Another challenge is the mixture of manual and IT processes used in China. "We obtain an electronic version of the purchasing plan from the OEM, and then enter it into (our) system manually, " says Wang Lin, who handles information management for Dongfeng Honda's principal logistics provider, Wuhan Dong Hon Logistics. "Only then can we generate a logistics plan."

Transport is dominated by small, local providers. "Basically the driver has a mobile phone and most communication is manual," says Karl Neumaier.

Finally, for movements of finished vehicles capacity has dramatically improved, but there is a need for co-ordination. "We have been investing in infrastructure for several years," says Owen Xie, senior manager for automotive at NYK Logistics. "Now it is time to integrate them."

Conference Director Louis Yiakoumi commented that all these challenges will not be overcome without the collaboration and search for solutions which a gathering of all the principal players together can produce.

"This is the sixth annual conference in China. I believe this event – and similar conferences we arrange around the world – have a good track record in creating the forums for real improvement."

The Automotive Logistics China conference is supported by the China Federation of Logistics and Procurement (CFLP). It will take place at the Intercontinental Hotel Pudong, starting with a networking reception on the evening of Monday April 20, and continuing with two full conference days including gala dinner on Tuesday and Wednesday, 21-22nd April. The conference is being held at the same time as the Shanghai auto show.

Published by Automotive Logistics www.automotivelogisticsmagazine.com.