Managing the supply chain for globally integrated products What sorts of activities As well as providing the systems and Exel has helped many leading compa- goods and materials a firm holds in are involved in supply solutions Exel also manages freight by nies across the globe to build effective stock. JIT involves: providing airfreight and seafreight supply chains including Pepsi-Cola, Introduction producing and delivering finished chain management? backed by an extensive transportation Unilever and Ford, and plays a key part • goods ‘just in time’ to be sold network. Customers can track the in many industries such as: Today many of the products Supply chain management requires Based on years of experience movement of their goods through an partly finished goods ‘just in time’ that we consume have been brought specialist skills and is all about efficiently and application of state of the chemicals where safe delivery is • extensive Internet based tracking • to be assembled into finished goods to us through globally integrated bringing together all of the links and stages art technology, Exel is able essential system. Because Exel manages the distribution systems. Striking examples involved in creating a high quality supply chain. to design improved supply movement of freight for many compa- healthcare where prompt delivery • parts ‘just in time’ to go into partly are the fruit and vegetables that we purchase In this case we show how Exel manages the chain systems for organ- • nies it is a major purchaser of trans- and temperature controlled finished goods in our local supermarket that arrive fresh from supply chains for many of the world’s leading isations which add more portation and is thus able to pass-on the conditions are important value for consumers. materials ‘just in time’ to be made far flung corners of the globe, and the motor businesses. Exel is a global leader in supply chain benefits of economies of scale, sub- • Creating an effective into parts. vehicles that we drive around in which contain management, providing customer focused stantially reducing transport costs for • retailing where cost effective and supply chain involves components from many different countries. We solutions to a wide range of manufacturing and customers that do not have the same waste eliminating systems are The principle that underpins JIT is that not only increasing tend to take the delivery of these products for retailing industries. Exel’s comprehensive range of purchasing power. In addition Exel essential production should be ‘pulled through’ the speed of delivery, granted without realising the real complexity of the innovative logistics solutions encompasses the organises the warehousing and distribu- rather than ‘pushed through’. This but also the quality • high-tech where instant and regular planning that is involved in making sure, that for complete supply chain from design and consulting tion of goods along the supply chain. means that production should be for of delivery – so that delivery is essential. example, all of the components for a modern VW through freight forwarding, warehousing and With considerable experience in this specific customer orders, so that the the end-consumer will However, this case focuses on the Beetle arrive at their final assembly point at just distribution services to integrated information field it is able to design large-scale dis- production cycle starts only once a benefit from more desir- contribution that Exel makes in the tribution outlets which are often shared customer has placed an order with the the right time. This case study, therefore, management and e-commerce. Exel now has able and hence more between various customers who again automotive industry where Just-In- introduces you to some of the processes that contract logistics operations in 31 countries valuable end-products. producer. Stocks are delivered when benefit from economies of scale in stor- Time and Lean Production systems go on behind the scenes by examining accounting for 84% of world GDP. Combined With Exel managing the they are needed. Consequently, this age and distribution. are essential. supply chain management. with Freight Management activities that cover supply chain for a business approach requires much more frequent over 120 countries around the world, Exel like Volkswagen or Ford the In recent years Exel has also enabled a delivery of stocks. Developing a JIT approach requires sophisticated plan- has unrivalled global coverage. company is able to concentrate range of businesses to take advantage Just-In-Time on its core business. Meanwhile, of business-to-business and business- and Lean Production ning and considerable experience in Exel provides innovative solu- to-consumer e-commerce activities. this field. This is why leading compa- tions as to how to reduce costs For example, a company selling goods Just-In-Time (JIT) is a very simple idea nies contract out their supply chain and accelerate the move- to customers using the web is then able but one that is essential in modern management to a specialist company ment of products locally, to deliver speedily to the end consumer supply chain management. JIT sets out like Exel with considerable experience regionally and globally. using Exel’s supply chain network. to cut costs by reducing the amount of of this area. Glossary of Keywords The results Adopting the supplier park model in Add more value: Increase the worth and usefulness of a product Mexico has helped VW to reach its pre- for the final consumer. sent level of 1,380 vehicles per day. Exel is providing supply chain services Business to business: Electronic/Internet links between not only for the new Beetle, but also for businesses. the A4, a redesigned Jetta and also the Business to consumer: Electronic/Internet links between a Golf models. business and its consumers. As an experienced logistics leader, Distribution: Getting the products from the factory into the hands operating globally, Exel has an estab- of the end-user with the help of various transport modes and the lished infrastructure in Mexico, servicing co-operation of wholesalers and retailers. clients such as Procter & Gamble and Just-In-Time is the key element in what able to increase the speed of the pro- countries like Mexico and Brazil – and Volkswagen collaborated with Exel, E-commerce: Buying and selling by means of the Internet, often DaimlerChrysler. However, Exel had to using a web site as the medium for making transactions. is termed lean production. Lean pro- duction line and produce more cars with with ready access to the lucrative which designed, engineered and now virtually start from scratch to staff the duction is a philosophy and a way of the same number of resources, lowering United States market. operates the innovative Park in Spain, supplier park in Puebla. It created a team Economies of scale: The advantages of carrying out business working involving eliminating all forms the overall unit cost of production. to transfer the park model to Mexico. of skilled and experienced managers operations on a large scale enabling a reduction in unit costs. of waste (where waste is defined as The Supplier Industrial Park in Spain The challenge for supply from Mexico, America and Europe, Final assembly: Putting together the final product, eg the anything that does not add value in the was created near the factory and now and hired line workers and sequencing VW Beetle. production process and supply chain). Helping Volkswagen to chain management includes 35 suppliers. Subassembly personnel from the Puebla area who transfer its JIT system Freight: The transport of goods. The idea behind lean production stems When Volkswagen decided to produce activities are carried out at the Park, were provided with intensive training. from Spain to Mexico guaranteeing JIT delivery and zero from Japan where for many years its new Beetle model, the goal was to Exel employs around 850 people at the GDP: Gross Domestic Product, the total value of the output of a supply chain managers have been seek- transfer the lean manufacturing tech- stocks at final assembly lines. Puebla facility. country in a given period. ing to eliminate ‘muda’ ie any activity One of the best examples of modern nique and highly effective just-in-time Exel is responsible for primary trans- which involves wasted effort, materials supply chain management is in motor supplier park model from the Globally integrated distribution system: Linked distribution port from the component suppliers’ and time. Exel is particularly effective vehicle manufacturing. Modern cars VW/SEAT assembly plant in Martorell Conclusion system bringing together various parts of the supply chain across main plants to the Park. The company the world. in ensuring lean production because it are an example of global products con- in Spain, to Puebla in Mexico. taining research and design features is also responsible for warehousing, is able to reduce ‘muda’ at every stage Supply chain management is an exciting Logistics: The organisation of moving and supplying equipment, which involve the collaboration of picking, subassembly and sequencing in the supply chain from designing effi- The solution and important area of study. Specialist materials, goods etc. cient warehousing systems, to sophisti- many people from many nations. The operations, and deliveries to the assem- companies like Exel are able to save the cated tracking methods in freight for- components that go into the final bly lines. When new deliveries are Sub-assembly: Putting together parts of the final product – eg Exel has worked with car manufactur- world’s leading businesses large amounts warding, developing e-commerce links, assembly are likely to be produced in required for assembling the cars mes- completed sections that will go into the VW Beetle. ers to develop a park system of manag- of money, time and effort by creating and cutting out any wasteful processes many separate locations and involve a sages are communicated from the plant ing end operations of the supply chain an effective supply chain.