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1 Auto Logistics and Supply Chain Management Summit 20xx The Practice of VMI in China 2 Agenda ?Our understanding of the automotive logistics needs ?What is VMI – definition, procedures and benefits ?Challenges of VMI in China ?Case study ?Brief introduction to China Logistics Company 3 An automotive OEM’s logistics needs cover both inbound and outbound operations of parts and finished vehicles Plant Suppliers Consolidation and Loading Center Service Parts Distribution Center Logistics for Production Parts Logistics for Service Parts Logistics for Complete Vehicles Dealer Dealer/ Service Station Bonded Warehouse for Import Parts Our understanding of the automotive logistics needs 4 Supply chain management (SCM) is the strategic management tool that coordinates the material and information flows across the value chain to support adaptiveness 5 “ Demandpull‖ value chain requires the panies to be flexible and able to ―control‖ a large part or the entire supply chain Suppliers Manufacturing Demand indirectly drives manufacturing volume through forecasts Warehouse Wholesale/Retail “ Supplypush‖ Logistics Chain Suppliers B2B Exchange Manufacturing Direct Delivery “ Demandpull‖ Logistics Chain Manufacturing driven by actual demand ? The rate of supply was set by the manufacturer in advance, based on expected demand ? It was the role of the logistics providers to ensure a justintime supply of ponents ? The rate of manufacture is determined on a realtime basis by the rate of demand ? While this model is more efficient, it requires perfect integration of all logistics operations within one process Source: Lehman Brothers, . Kearney Analysis 6 Thirdparty logistics providers (3PLs) can directly, or through a partner work, provide a range of services ? Procurement ? Payables management ? Supplier payment and consolidated invoicing ? Vendor performance monitoring and exception reporting ? Joint process improvement with vendors ? Overall freight coordination ? Full load truck carrying ? Lessthanload truck carrying ? Small lot (less than 150 pounds) carrying ? Order consolidation ? Delivery scheduling ? Expediting special / rush orders ? Returning and reprocessing undeliverable orders ? Delivery tracing ? Performance and exception monitoring and reporting ? Overall inventory management ? Optimizing supplier order schedules ? Optimizing dealer order schedules ? Certification of ining shipments ? Bar coding ? Performance and exception monitoring and reporting ? Tracking and Reporting Systems accessible via Inter ? Material Resource Planning ? Order preparation / assembly / consolidation ? Sourcing of packaging materials ? Printing of corrugate and/or linerboard materials ? Labeling ? Shrink wrapping of cases