For a supply chain to become lean, every part of the supply chain has to work properly. (The same is true in manufacturing; the whole point of total productive maintenance is to eliminate machinery downtime.)
The problem today with automotive supply chains is that they don’t work properly. That’s one of the things I learned at the Automotive News World Congress recently – along with the fact that the problems cannot be fixed simply by applying lean principles.
Alan DeCarr, group vice president of Toyota Logistics Services, presented some disturbing information during his presentation. And the problems he described, which I’ll get to in a moment, are exacerbated by increasing demand for his group’s services.
Last year, sales grew faster than
Rail deliveries are a particular problem, with an on-time performance last year of only 78 percent and quality performance of 0.24 percent. Ironically, that is partly because the
In addition, DeCarr said, the rail industry has a continuing shortage of rail cars designed for hauling automobiles, particularly trilevel cars.
To address these rail issues, DeCarr said
DeCarr also noted that, for shipping vehicles from
Meanwhile, trucking companies are having a tough time, hit by downward pricing pressure, aging equipment and driver shortages. The two largest auto carriers filed for bankruptcy last year.
To help, DeCarr said his group is trying to offer fair rates that support reinvestment, equipment financing and network rationalization. He added, “we’ve expanded the use of Toyota-branded carriers as appropriate.” Also,
Other comments at the conference came from Christopher Connor, president (
Connor noted that not every shipping problem is actually a shipping problem. In some cases, “what might appear to be a logistics problem is an internal situation,” he commented. For example, a manufacturer will have finished cars on the ground but be unable to release them because of a problem involving quality, finance, or the vehicle not being allocated to a particular region. When release finally occurs, that causes a very un-heijunka-like surge.
However, Connor agreed with DeCarr about the problems of infrastructure.
“What keeps me awake is the concern over the future,” he said. “There has not been investment in automobile transport equipment. It’s a big problem.”