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? Check documentation and finally pay invoice. It involves functions across the customer: ? Production Planning ? Quality Control ? Logistics and Materials Management ? IT ? Finance 19 Major capacity and quality issues arises when 50% annual growth is anticipated ? Undercapacity for warehousing space ? There are constraints as production capacity needs to be boomed to meet increasing customer demands ? Manufacturing flexibility is low ? When parts ordered before are already on their way while production plan needs to be changed, either the parts have to go back or the production plan has to remain unchanged since there is no space for the unwanted parts ? When parts received are found defected production has not been able to swift to alternative plan as there is little other stock in the factory ? Quality has been promised: ? As there is little stock on hand some parts with defects have to be repaired and used, hence quality is not at its best from time to time ? Communications consume plenty of time ? Each function may have to contact suppliers for their own responsibilities to conduct the previously mentioned activities making the operation less smooth Component Supplier — Inbound Logistics 20 Project Rollout Schedule Contract negotiation Supplier agreement negotiation Setup Go live July Aug Sept Main tasks ?Warehouse decoration ?Office setup ?WMS System fine tuning ?Staff training ?Procurement of equipments ?Internal SOP ?Quality inspection capabilities improvement Main tasks ? Price ? Process ? SOP ? KPI Main tasks ? Inventory level ? Price and Payment ? SOP amp。 ? Receive and unpack parts, store and picking ? Inspect and sort parts。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 for