Keeping China Supplied - Automotive Logisticsautomotivelogistics.media/wp-content/uploads/2017/04/ALChina17...Keeping China Supplied Ensure a stable, efficient inbound supply chain

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Keeping China Supplied Ensure a stable, efficient inbound supply chain

Andreas Subbe Director Supply Chain Management Automotive Asia Pacific

Continental Automotive Holding Co. Ltd

Public

Continental China 24 May 2016

2 Andreas.Subbe@ Continental AG

Agenda

Continental China - At a Glance 1

Market Challenges China 2

Supplier Management at Continental 3

Collaboration & Best Practice Examples 4

Key Messages 5

Public

Continental China

Continental Corporation Five Strong Divisions

3

Chassis & Safety

Vehicle Dynamics

Hydraulic

Brake Systems

Passive Safety &

Sensorics

Advanced Driver

Assistance Systems

(ADAS)

Powertrain

Engine Systems

Transmission

Hybrid Electric

Vehicle

Sensors &

Actuators

Fuel &

Exhaust Management

Interior

Instrumentation &

Driver HMI

Infotainment &

Connectivity

Intelligent Transportation

Systems

Body & Security

Commercial Vehicles &

Aftermarket

Tires

PLT,

Original Equipment

PLT, Repl. Business,

EMEA


The Americas


Asia Pacific

Commercial

Vehicle Tires

Two Wheel Tires

ContiTech

Air Spring Systems

Benecke-Kaliko

Group

Compounding

Technology

Conveyor Belt

Group

Elastomer Coatings

Fluid Technology

Power Transmission

Group

Vibration Control

PLT – Passenger and Light Truck Tires

Supply Chain Management Automotive

(SCMA)

24 May 2016

Andreas.Subbe@ Continental AG

Public

Continental China

In the Market for the Market Customized Solutions for Chinese Market

4

Caliper Actuation ABS Airbag

Control Unit

Chassis

& Safety

Powertrain

Interior

Tire

ContiTech

Passenger Car Tires Light Truck Tires

ESC

...

Short Range

Lidar

EMS(DI Injector, DI Pump) Transmission

Management

System

Fuel Supply NOx Sensor

...

...

48 V Machine

Hose

Lines

Engine

Belt

Engine

Mount

Air

Spring

Interior

Foil

Conveyor

Belt

Elastomer

Coatings

Two-Wheel Tires

...

...

Instrument

Cluster

Body Control

Units

Access & Start

Systems

Tire Pressure

Monitoring

Multimedia

Systems

Connectivity

& Telematic

Truck

Instruments &

Control Units

SCR Systems

S

C

M

A

24 May 2016


Public

Continental China

Continental in China Locations Map

24 May 2016

5

Manufacturing

Locations

R&D Locations

Sales Offices

Joint Venture

Headquarters Heihe

Changchun

Tianjin

Shanghai

Changzhi

Ninghai

Wuhu Hefei

Lianyungang

Jinan

Zhangjiagang

Changshu

Beijing

Liuzhou Guangzhou

Taipei

Chongqing

Nanjing

Wuhan

Status: Mar. 2015

Manufacturing Locations: 26

Sales Offices: 27

R&D Center: 17

Joint Ventures: 13

Total Employees: >25,000

Shenyang

Qufu

Sanmen

Yangzhou

Baoding Qingdao

Yanzhou Changzhou


Public



Agenda





Key Messages 5

Public

Continental China

China – Roadmap of Industrialization From Volume to Value

1980 1995 2020 >2025

Opening The

Manufacturing

House

Largest

Market of the

World

Innovation

24 May 2016

Andreas.Subbe@ Continental AG 7

Public

Continental China

Our Supply Chain Complexity in Asia Volatile Conditions Lead to High Inventories

24 May 2016


Product

launches

Engineering

Changes

Inventories

Production

set-up

Big production lots

Machine breakdown

Line imbalance

Shared equipment

Intercompany

Clearance

Demand

insecurities

Complexity

No. of products (~4,000)

No. of customers (132)

No. of supplier locations (~3,500)

No. of materials (~52,000)

...

Levels

HQ / regions / locations

Responsibilities

Value flow

IO / Process levels

...

+

Long throughput

time Quality defects

Logistics

set-up

Sales variations

Demand forecast

Order leadtime

Production

throughput time

Transport time

Delivery reliability

Product quality

Process quality

Lead times

Flexibility

SAP parameters

Product

transfers

Product

launches

Engineering

Changes

Public


9

Invoicing

Delivery

Forecasting /

Order reliability

General Terms

› According INCOTERM

› ExW / FCA

› Customer picks up / controls supply

› 12 month FC / 1~3 month binding

› 10% max. fluctuation

› Model cycles of 5-6 years

› Capacity and volume agreements

once a year

› Common platforms for forecasting

and planning in use

› Clearly defined process for Quality

claims

› After confirmation from customer

› Customer Depots / DDU

› Safety stock requirements

› 0~3 month FC

› 100 % delivery performance

› Fast changing model cycles

› Higher frequency of capacity

and volume negotiations

› Planning tools are increasing but

still under development

› Unilateral deduction of warranty

amounts

Global OEMs Asia OEMs

Requirements of our Chinese Customers Challenges for Building a Robust Supply Chain


Public

Continental China

Requirements for Our Supply Chain in Asia Collaboration with Customers and Suppliers

24 May 2016


Effic

ien

cy

How to improve

collaboration with

customers and

suppliers?

We only can face the

challenges together

with our business

partners –

Growth

Together

Trans-

parency

› Establish most realistic forecast

planning through the entire Supply

Chain

› Agree on logistics requirements and

standard delivery terms

Reliability

› Align requirements between OEMs,

Continental Automotive and Suppliers

› Establish EDI or WebEDI process

Perfor-

mance

› Develop a robust and highly flexible

Supply Chain

› Reduce lead time within the entire

Supply Chain - inventory optimization

Public



Partnership Across Entire Supply Chain Inbound Process Collaboration with Suppliers & Business Partners

CONTINENTAL

Quality

Warehouse

External

Warehouse

Subcontractor

Supplier

(external or

internal)

Customer

Production

External Warehouse

(3PL)

Inbound

Delivery

› Data exchange via EDI or Web-EDI > 85% with suppliers

› Consignment stock and subcontractor stock under SAP control

› MAT-label , ASN, Self – billing in progress

Source Make Delivery return return

Public


13

15. April 2010,

Iceland

11. March 2011,

Japan

October 2011,

Thailand

Crisis Management Expect the Unexpected


15. April 2016

Japan

Public



Agenda





Key Messages 5

Public

Continental China

Supplier Management Overview @ CA SCM Close Loop from Supplier Sourcing to further Development


24 May 2016

15

Supplier Business Partner Management Supplier Performance Evaluation & Surstainabilty

Risk & Allocation Management Supplier Development / Phase out

Conti

Supplier

Standards (GSCC)

Part I : Requirements (Mandatory Reqst & Binding)

Part II: Description ( Process & Measurement for

Acknowledgement)

SCU EDI

Delivery Performance

Service

Criteria

PSM

MMOGLE

100%

Basis for Sourcing

decision

Support Supplier

Comparison

Risk

Management

MSM

Allocation

PTN

LINKS

SCID

Enable Supplier

Improvement Action

15

https://www.google.fr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjtwr6Y1cbSAhXLhRoKHXgyCF0QjRwIBw&url=https://www.touchstonerenard.com/what-we-do/performance-improvement&bvm=bv.149093890,d.d2s&psig=AFQjCNFm-nsb-FD_x446sKCadBXrHPwflQ&ust=1489054123266520

Public

Continental China

› Early involvement in Sourcing Process & Sourcing Database setup

Supplier Business Partner Management Common Requirement Understanding in the very beginning

24 May 2016

16

SCR

Sourcing

› Clear structure on Supplier Requirement ( Global Supply Chain Concept | GSCC)

Send RFQ and

analyze offers

Sourcing

kick-off

Complete

Sourcing plan

Early Supplier

involvement

Maturity

evaluation

Perform project

team kick-off

meeting … …

Final negotiation

and award to

Supplier

Web-EDI Platform

… … … … …

Part I: Requirements:

- Order Communication

- Delivery Reliability

- EDI

- Preferred Sourcing Models

- MMOG/LE

- Labeling

- Package Requirements

…

Parts II: Explanations

Description of our SCM processes and

measurements

= Logistics Manual

Supplier confirms to have read and understood the

explanations

Part I:

Requirements

Parts II:

Explanations

Global SCC

Binding Known

CTT


Public

Continental China

SCM Performance

(100%)

Supply Chain Performance Evaluation Service Criteria also be included

24 May 2016

17

Delivery

Perfor-

mance

MMOG/LE

Preferred

Sourcing Model

(PSM)

Service

Criteria

Service Criteria

Supplier behavior in case of

poor delivery performance

Flexibility regarding changes

in demand

Packaging / Labeling

Allocation Management

Information & Communication


Public

Continental China

18

Suppliers Comparison Factor - SCF Impact on sourcing decisions

SCM Potential

Criteria for SCM Potential

GMMOG/LE V4

Mat Label

Supply On Performance Monitor

Supply On Document Manager

EDI/WEB EDI Connections

PSM Contract updated

SC Performance Trend

Allocation

SCMA Supplier Coach

SCM

Performance

*BASE = Basic Annual Supplier Evaluation

Andreas.Subbe@ Continental AG 24 May 2016

Public

Continental China

Risk Management @ Continental Automotive Expect the Unexpected

24 May 2016


Supplier On-site support

Proactive Crisis Avoidance Processes

Parts Change / Termination Notification

Material Shortage

Management

Customer

War Rooms

Risk Management

Public

Continental China

Supplier Risk & Allocation Management Phases & Escalation Level of Material Shortage Mgmt.

20

Phase 1 /

„idle speed“

Phase 2 / Escalation level 1

„speeding up“

Phase 3 / Escalation level 2

„full speed“

Phase 4 /

„slow down & idle speed“

24 May 2016


Public

Continental China

21

Supplier Management SCM Benefit from Supplier localization

Reduce the Transit time

No Duty / Customs Handling

Consignment + JIT

Returnable Package

Local Language and same time slot

Fast reaction

Improve communication

Shorten the Supply Chain

Reduce Workload

Speed

Efficiency

Quality

24 May 2016


Public



Agenda





Key Messages 5

Public

Continental China

Our Approach on 3PL Management – Forwarder Management Collaboration in Strategic Partnership

24

Transparency

Positive

impact on

inventories

and TR

Material flow

optimization Cash

Premium

freight

reduction

Performance

Increase

Transaction

cost

decrease

Reporting

Tools

Evaluation and KPI

Tender

Business reduction of

LSPs in case of non-

performance

Strategic partnerships

24 May 2016


Public

Continental China

Network Design: Collaboration across Plants Current and Future Network

24 May 2016


› No/ little realization of synergies across

locations

› Lack of transparency about status of

transports and shipments

› Manual planning and execution

processes

› Cross-plant realization of transportation

synergies

› Full visibility about shipment status

› System supported planning, execution

and exception handling processes

Public

Continental China

Collaboration in Returnable Packaging Solutions Increase Competitiveness and Quality Level

24 May 2016

26

› China Returnable Packaging and Standardization

› Covering the supply chain from supplier till Customer 3PL warehouse


Public



Agenda



KPI System for Best in Class Supply Chain 3


Key Messages 5

Public

Continental China

Best in Class Supply Chain Key Messages

24 May 2016


Best in class Supply Chain can only be achieved in active partnership with all

involved stakeholders as OEMs, Tier1, Suppliers and 3PL Service Providers

Transparency, Efficiency and Performance: Supplier Business Partner

Management to ensure right understanding about requirements during sourcing

Continuous Local Supplier Development and Performance Mmgt minimize risk

of disruptive situations, proactive Risk Managememt to minimize allocations

Asia and particular China will continue to be the world key market of growth

in automotive, continuous supply chain optimization and localization required

Various Collaboration Projects around transportation and packaging with

suppliers to ensure competitive, transparent and sustainable supply chains

Public

Continental China

THANK YOU!

Transparency

Partnership

Documents

Keeping China Supplied - Automotive Logisticsautomotivelogistics.media/wp-content/uploads/2017/04/ALChina17...Keeping China Supplied Ensure a stable, efficient inbound supply chain