Supply Chain World - Volume 7, Issue 3 - 11

LOGISTICS

That worked when automotive retail
customers were less used to customization and were tolerant of foreign made
luxury cars with customized features
that would commonly require delivery
wait periods sometimes equal to six or
more months. This was an acceptable
sacrifice to purchase a car exactly way
they wanted it.
In light of the growth of customer-driven customization, high demands for quick delivery and OEM's
reaction to substantial competition in
the American car market, OEMs have
consequently adopted over the years
various aggressive production method-

ologies and supply chain restructuring,
including just-in-sequence production. These changes have resulted in
OEMs pushing for more local supply,
in addition to redundancy in their
supply chains - they cannot wait for
downstream suppliers with a plant
in Europe or Asia to not only make
the part, but then get it on a ship and
across the ocean with such shortened
end user delivery expectations.

"OEMs face growing
uncertainty about whether
products being imported to the
United States will be subject to
increased tariffs."
_________
The current trade climate is another
piece of this puzzle driving the evolution of the innovations in the automotive logistics supply chain. OEMs face
growing uncertainty about whether
products being imported into the United States will be subject to increased
tariffs, resulting in unanticipated price
increases of the parts and components
they need.
Although that has certainly added
urgency to the push for downstream
suppliers to enter the United States,
price instability is a factor even in a
peaceful, clear trade climate because
of the variability of exchange rates and
unanticipated price changes in global
demand for critical commodities, such
as steel and aluminum. By increasing
production of parts and components in
the same market as the OEM's facility,
price volatility can be mitigated.
The last trend at play is the rapidly
increasing complexity of the automotive supply chain. OEMs are producing
a greater variety of car models, and as
that variety increases, the components
and technologies within each model

are becoming more and more customized based on the features customers
demand. As a result, there is now a much
larger pool of suppliers, including niche
suppliers, providing the product inputs
needed by the OEMs.
All those trends continue to create
opportunities in the United States for
transportation and logistics companies. As the localization of production
becomes more and more critical, there
is greater demand for more sophisticated transportation and logistics
solutions provided by the international
logistics industry. The more local production you have, the more logistics
services you need.
Rudolph Logistics saw this playing
out in the automotive industry and
capitalized on it. "Everybody was very
good at what they were doing, and the
missing link to it was logistics," Just
says. "They all need somebody not just
to transport the goods to the customer
- that's easy, right? - but also to supply
them with the added value along the
supply chain in terms of sequencing,
smart warehousing, and ensuring their
goods appear at the front door of the
end customer's factory at the right
time, in the right quality, and in the
right volume."
Rudolph opened its first U.S. facility
about two years ago in South Carolina,
an important automotive location within the American market, hosting BMW's
largest global manufacturing facility as
well as other OEMs such as Volvo and
Mercedes Vans. Just says the opportunity today is still "huge."
"The business climate is extremely
positive based on what we've experienced firsthand in the Southeastern
United States, specifically, South
Carolina," he says. "The demand is there
because more and more factories are
opening up."
As logistics companies consider
opening a U.S. facility or expanding their
VOLUME 7, ISSUE 3 Supply Chain World

Supply Chain World - Volume 7, Issue 3

Table of Contents for the Digital Edition of Supply Chain World - Volume 7, Issue 3