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The automotive industry was severely hit by the 2008 crisis, leading to the closure of production plants and hiring freezes. After a short period of growth, the sector is again facing uncertainty due to a significant decrease in diesel vehicle sales as a result of changes in public policies, the difficult shift towards electric vehicles and the global trend towards car sharing. These evolutions tend to decrease anticipated sales but bring new business opportunities.

Challenges

Facing these events is challenging for car manufacturers and auto parts suppliers. Recent initiatives, such as the acquisition of Kapten by Daimler and Michelin’s strategy of investing in mobility services, especially in digital technologies, demonstrate the massive shift that is coming in the future.

The impact on operations is significant. A complete change of the industrial tools, the need for agility in a traditionally cost-focused industry where fast adaptation of production capacities or mix is a huge problem and the management of spare parts in a circular economy including electric batteries have all changed the operational landscape.

How we can help

We support manufacturers and suppliers in the necessary transformation of their operations with a particular focus on agility, from identifying issues to the implementation of performance levers:

  • Procurement and optimisation of the upstream supply chain: sourcing strategy, supplier collaboration and performance, reduction of procurement delays, stock optimisation and procurement performance
  • Industrial strategy: optimising footprint and allocation of products to sites based on demand uncertainty
  • Vehicle sales forecasts and S&OP
  • Supply chain planning of final assembly lines and spare parts plants: demand management, multisite planning, capacity planning and optimisation of the vehicle film, scheduling optimisation, management of synchronised flow and just-in-time flow
  • Industrial performance and lean management, maintenance of industrial infrastructures
  • Optimising the distribution of vehicles. Real-time flow follow-up thanks to IoT solutions
  • Optimisation of the spare parts supply chain: service strategy and logistics strategy, optimisation of assortments in the network and sales forecasts with machine learning technologies, supply chain planning, inventory reduction, logistics process efficiency for transportation and warehousing services

Automotive case studies

Spare parts distribution centre design

automotive

Spare parts distribution centre design

The Commercial Vehicle Business Unit (CVBU) of Tata Motors aims to double the current revenue of US$0.5 billion to US$1 billion over the next three to five years. The CVBU currently has four Distribution Centres across India. The Pune DC was identified as the first modernisation project to build a state of the art DC.

The issue was that space was running out in the current DC, there were mostly manual processes with mechanization, labour intensive packing processes and a major issue with inventory accuracy.

Our role

  • Design a DC to handle year 2020 volumes
  • Design a solution to incorporate the volumes from the slow moving parts DC
  • Identify the maximum volumes that the DC can support
  • Design a method to collect the item cubes for the purpose of calculating the storage cube (in the absence of cube data)
  • Evaluate appropriate automation for various processes

Results

  • Developed a futuristic design along with detailed specs for MHEs, capex and opex requirements, electrical, lighting and CCTV layout
  • Design allowed use of existing storage system
  • Designed a batch-pick and sort (by Put-To-light) for processing of small item orders
  • Developed training materials and conducted “train the trainer” sessions

Increasing effectiveness in third party operations

FMCG

Increasing effectiveness in third party operations

Manheim Global Trader handles all export activity for Manheim who is the world’s leading provider of vehicle remarketing services. Manheim registers nearly seven million used vehicles annually and facilitates transactions representing almost USD $46 billion in value.

The company wanted to expand into Europe, however understanding the EU used car market is not a simple exercise. This is caused by disparate data sources and different taxation and legal regulations in each EU member state.

Our role

  • Report market size and trends for the major EU member states by car attributes, purchase source and customer type
  • Provide insight on volumes moved within the EU and across its borders
  • Deliver information on regulation and taxation applicable to import and export of used cars between and out from EU member states

Results

  • Comprehensive report on the EU used car market, with a focus on the major economies of Germany, Spain, UK, Italy and France
  • Insights on key vehicle characteristics in the EU based on in-depth data analysis
  • Connected the company with national vehicle registration authorities and organisations

Supply chain network

automotive parts

Supply chain network

Genuine Parts Company is an American service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials. GPC is the parent company for Repco and Ashdown Ingram.

Repco operates in the Australasian markets. The Repco store network operates over 400 stores in Australia and New Zealand. Ashdown Ingram is a specialised parts dealer providing heavy and specialised parts. One of Ashdown Ingram’s key markets is mining. Argon & Co was engaged to review the national supply chain network.

Our role

  • Lead a national network review project
  • Review of sales growth and strategic planning
  • Develop a cost to serve model across each element of the supply chain and supplier base
  • Review potential for DC network optimisation
  • SKU range review
  • Productivity and systems review

Results

  • Recommendations on a new network with a reduced footprint and costs, with sufficient room for growth via acquisition
  • Detailed warehouse design and build
  • Business case for new network and savings
  • Identification of system to support improved productivity
  • Roadmap for delivery

Finance transformation

automotive

Finance transformation

With revenues of €13bn, Emil Frey is the largest car dealer group in Europe.

To gain efficiency and effectiveness in finance and administrative processes, the company launched several initiatives in Finance.

Our role

  • Bring expertise in Finance transformation
  • Identify improvement levers, including digital levers
  • Conduct in-depth analysis of processes to evaluate the potential for RPA (Robotic Process Automation) and produce an implementation roadmap
  • Evaluate supplier invoice digitisation solutions and support design and implementation stages of the selected solution

Results

  • Automation of F&A processes through RPA
  • Increase of efficiency, effectiveness and compliance of supplier invoice processing through the digitisation solution

Estimating labour for line feeding

tractor manufacturing

Estimating labour for line feeding

The company is a joint venture between an Indian company and a Swedish multinational commercial vehicle manufacturer. It has been operating since 2008. The company’s vision is to be recognized as the industry leader driving modernization in commercial transportation in India and the developing world.
Argon & Co supported the creation of a 3PL contract for managing the line feeding operations at one of India’s largest tractor manufacturers.

Our role

  • Estimate manpower required for various line feeding activities across the 200,000 square metre plant of India’s third largest tractor manufacturer
  • Isolate potential problems, changes in methods and revalidating defined scope of work for the 3PL proposal
  • Mark out a detailed flow of material within the different buildings and across buildings in the plant
  • Identify potential improvements in storage, systems and processes based on time studies

Results

  • Using time studies and derived process rates, provided a model to predict manpower needed in the plant based on different production scenarios
  • Better methods that could potentially reduce 15-19% of time spent were identified
  • Changes suggested in storage methods could result in savings of 20-25% of the storage area
  • Identified and suggested additional simple system features to help improve operations