Volcanic ash disruption highlights need for OEMs to reinforce contingency plans for extended supply chains
May 04, 2010 Comments (0)
Repercussions from Aprils volcanic ash disruption continue to cause problems for vehicle manufacturers, many of whom operate extended supply chains with Tier 2 components suppliers often situated in distant locations. Emergency logistics specialist Evolution Time Critical reports a surge in requests for time critical deliveries both during the closure of UK air space and in the following week, as airlines struggle to cope with a backlog of thousands of tonnes of cargo as well as thousands of stranded passengers. The companys managing director, Brad Brennan, has observed that the episode clearly demonstrates the need for more extensive contingency planning among car makers, in order to prevent costly line stoppages.
The majority of problems currently being experienced by OE our customers relate to delayed parts deliveries from Tier 2 to Tier 1 suppliers, with electrical components among the most badly hit, explains Evolutions managing director, Brad Brennan. Many of the electrical components from Tier 2 suppliers to Tier 1s are scheduled by air because of the high value to weight ratio and physical distance between the two companies. First tier supply within Europe has not suffered a great deal of disruption as little airfreight is scheduled from these suppliers. Any shipments due to be transported by air have been handled by fast van with relative ease.
Evolution used a combination of on-board courier, dedicated road transport and airfreight to facilitate urgent deliveries during and post-ash crisis, selecting routes via airports in southern Europe. In one instance, the company rescued a shipment of electrical components from China that was delayed in Hong Kong as the shipper had been unable to make an airfreight booking. Evolutions team swiftly secured one of the last seats on a flight and booked an on-board courier to carry the shipment as excess baggage. The parts were flown to Londons Heathrow airport, where a driver was in place and ready to transport the goods to a waiting helicopter. The parts were delivered with 15 minutes to spare before it would have been necessary to stop the manufacturers assembly line. Similarly, Evolution arranged for the urgent transport of another shipment of electrical components from Japans Nartita Airport via Frankfurt to London, where a driver was waiting to complete the journey.
Given the difficulty in booking cargo on flights amid a significant backlog, our priority was to obtain sufficient seats for onboard couriers and arrange appropriate transport to meet the flight. A seamless journey was vital to keeping our customers production lines running. We had to act decisively if a customer took more than ten minutes to decide on an onboard courier the seat would be lost. By combining different methods of transport we were able to complete the deliveries more rapidly than if they had been carried by standard airfreight. We made the Hong Kong to London delivery in 21 hours, less than half the time it would have taken to transport the goods, even under normal circumstances, continues Brennan.
Brennans team also supported one manufacturer with a sequence of airfreights from India to Europe, carrying out 20 shipments from six locations in India to a variety of European airports. The components had already been scheduled to be moved by airfreight before the ash cloud struck. Evolution was called in when the ensuing transport chaos threatened to halt production lines. The company managed the delivery of a flow of product from different suppliers to different plants, often obtaining premium space when it was otherwise hard to come by.
The havoc brought about by the closure of UK air space highlights the need for vehicle manufacturers to reexamine and reinforce their contingency plans, concludes Brennan. With Tier 2 suppliers increasingly located at a considerable distance from manufacturing sites, automotive supply chains are growing longer and are consequently more at risk when circumstances beyond our control disrupt the international airspace.
About Evolution Time Critical
Evolution Time Critical is the worlds leading specialist in emergency logistics for the automotive industry. Analysts are available 24 hours a day, ready to develop and implement solutions in any part of the world within a 15-minute response window, calling on a vast range of techniques, skills and contacts to ensure that goods reach their destination on time.
The skills of Evolutions team are also available for consulting projects, helping clients to achieve additional savings in their supply chains while also strengthening and improving manufacturing efficiency. Increasingly, Evolution has found that emergency logistics is playing an integral role in lean strategies as the automotive industry returns to higher production volumes, allowing further inventory reductions while maintaining the reliability of deliveries to manufacturing plants.
The expertise and techniques developed by Evolution for the automotive sector are also benefiting the aerospace and marine industries, where the company helps clients to release capital trapped in spare parts by facilitating urgent parts deliveries, and return aircraft and ships to service more quickly.
In February 2010, Evolution Time Critical won the Frost & Sullivan 2010 European Logistics Vertical Market Penetration award for its strong growth and performance in the emergency logistics sector.