point of view and homogeneous logistic procedures. Integrated Product Data Management Systems, as described inChap. 2, can easily accomplish this task.
During the ‘90s, the availability of ICT systems and development of the WEB network allowed for a new deep change in logistic processes.
In conclusion, we observe that, according to new trends, Logistics is not only a specific company department, but an interfunctional integrated process that supports Supply Chain Management.
Let us conclude this short historical overview of Logistics, emphasizing that it has always been influenced by information technology and communication sys- tems progress. Nevertheless, although much evolution has occurred, the primary target is stillproviding materials in the right quantity, at the required quality, at the right point of use, in the right time and with the minimum cost.
By this definition, ‘‘right’’ means what is established between Customer and Supplier through the several stages of the ‘‘supply chain’’, in relation to final customer expectations and the commitment assumed by the producer. Minimum cost means having an economic global logistic process, including: dedicated system working cost, committed services cost, and financial burdens due to work in progress capital (production and distribution).
To the reader that still does not know production planning and inventory management criteria, we suggest looking at the final section, on basic concepts, at the end of this book. It deals with general basic concepts not specifically related to automotive logistic processes that, conversely, are treated as such in this section.
Conversely, logistic-industrial relationships are managed bySupply Chain Man- agementandManufacturing Management departments, following the procedures described in this chapter.
The typical SC configuration for the car business is represented in the chart in Fig.6.1. In it, we find the plants but not the companies, as we similarly find the sites of the dealers for receiving and dispatching to customers but not the agencies for sales. It is also important to consider that the suppliers themselves operate with more production plants, often dedicated to more customers.
As demonstrated in the scheme, the SC is a tree structure, from a conceptual point of view very close to the Product Breakdown Structure or to the Bill of Material seen inChap. 2, even if it is not necessarily the same.
• Final producer plant, or co-producer plants, is at the top of the SC (level 0).
• Logically linked to them, even if from far away, are the plants producing mechanical sub-assemblies and main body components and modules (level 1).
• Then followlevels 2 and 3, which include plants producing minor components and parts that can also be of high technological content, but not presenting constraints for the manufacturing lead timeof the final product.
At each one of the above levels, we also find raw materials and standard component suppliers, which can be assimilated tocommodities.
In the chapter on Basic Concepts, we will see, in general terms, what are the possible organizational types of logic applicable for productive flow management.
Now, we refer to production activities for automotive industries and related logistic processes along the SC.
CARS FINAL ASSEMBLING
PLANT
PLANT N COMPONENTS AND PRIMARY GROUPS PRIMARI FINAL PRODUCT
PLANT 2 COMPONENTS AND SECONDARY
GROUPS
PLANT K COMPONENTS AND SECONDARY
GROUPS PLANT 3
COMPONENTS AND SECONDARY
GROUPS
AREA 1 AREA 2
AREA Z
COMMERCIAL NETWORK DIVIDED INTO y CENTRE
FOR EACH AREA CENTRE y1 CENTRE y2 CENTRE yK
PLANT 2 COMPONENTS AND PRIMARY
GROUPS PLANT 1
COMPONENTS AND PRIMARY
GROUPS
PLANT 1 SUBCOMPONENTS
PLANT 2 SUBCOMPONENTS
PLANT 3 SUBCOMPONENTS
PLANT J SUBCOMPONENTS J SUBCOMPONENTS SUPPLIER PLANTS TO PLANTS 1 … K PLANT 1
COMPONENTS AND SECONDARY
GROUPS
K COMPONENTS AND SECONDARY GROUPS SUPPLIER PLANTS PLANT 3
COMPONENTS AND PRIMARY
GROUPS
N COMPONENTS AND PRIMARY GROUPS SUPPLIER PLANTS
Fig. 6.1 Supply Chain structure in automotive industries
In Final Assembly plants, with reference to the block diagrams in Sect. 1.6, production flows are organized through apull logic, considering the number of models and different versions offered to customers. It is the classic condition in which production is led by customer demand, associated first of all with vehicles and body assembly systems, but can also be transferred to engines, transmission, suspension and assembly of the main body’s modules. The same logic is also true for industrial vehicles, agricultural and construction equipment applications, motorbikes and other technologically complex products. In the following section, we will look at thematerial handlingcriteria necessary to set the pull logic.
In remaining technological areas along the SC, other criteria are normally applied that tend more towards apush logic. In particular, for raw material and standard components that can be supplied by different alternative sources (even those geographically far away), some localized buffers are admitted. This pro- duction is normally set through logistics of economic batches, with delivery plans being dependent on transportation methods.
A mixed ‘‘push and pull’’ logic is applied for the production of components with medium–high logistic complexity; this production uses homogeneous man- ufacturing systems to supply a wide range of customers (including spare parts).
Some examples are:
• bulky electrical and fluidic-thermal components;
• wheel rims complete with tires;
• very complex and specific castings for the manufacture of engines and transmissions.
To limit lead time of orders for final products (vehicles and powertrain sys- tems), these upstream productive processes must be set in advance to a commercial network order acquisition process. Related supplies of materials are made in general on a sales forecast according to MPS (Master Production Scheduling), through which requirements are aggregated in homogeneous families of products, with time horizons that consider the lead time of both processes, both transpor- tation and dispatching methods. For these types of components, carmakers nor- mally require their suppliers to manage their warehouses nearby the final assembly plants with stock on consignment, to allow for the application of a just in time (JIT) logic in the general assembly lines.
To feed components to general assembly lines in a JIT logic,kanbantechniques are used; kanban works to replace empty units with full ones through specific tags that travel together along the loading unit (the modern ones with automatic reading procedure) and on which are reported certain important information such as part number, utilization point…This tool allows for the simplification of productive and logistic flows, minimizing material stocks at all levels and reducing material handling operations in final assembly; in this way order lead time for final cus- tomers can be shortened.
As we will see inSect. 6.4, automotive operational planning is focused on the first two levels of the SC (0 and 1), the production flows of which are directly dictated by commercial demand, based on collection of customer orders.
Nevertheless, the logistic process also invests the other levels of the SC and includes the following macro flows:
• Physical Flow
This begins with raw material supply, crosses all stages of transformation along the SC, and also includes stocking and handling phases up to final assembly and final testing of vehicles, from which follows commercial dispatching and distribution.
Speeding up physical flow allows for the quick answering of customer demand and short order lead time.
• Information Flow
This goes in the opposite direction of physical flow, starting from customer demand to suppliers through different stages of the Master Production Scheduling (MPS), the Material Requirement Planning (MRP) and the Production Scheduling (scheduling), up to the dispatching of goods (dispatching).
Information flow allows for constant planning and controlling of the progress of production and delivery, at every stage of SC.
• Financial Flows
This is a consequence of physical flow and is evaluated based on data detected from the information flow at every delivery point incoming and outgoing at the different stages of the SC. Direct materials are transformed and aggregated, pro- gressively adding value, up to product completion and customer delivery.
It is fundamental to observe that, under the same economic conditions (pur- chasing prices, transformation costs), working capital reduces in inverse propor- tion to physical flow speed Fig.6.2.
CUSTOMERS TRANSFORMATION IN
COMPANY’S PLANTS
information flow physical flow
financial flow
DIRECT MATERIAL SUPPLY PROCESS FROM SUPPLIER’S PLANTS
FINALPRODUCT DISPATCHING TO COMMERCIAL NETWORK (DEALERS)
Fig. 6.2 The three main flows of logistics