DSV designing a superior logistics and transportation solution for BMW South Africa

Transcription

1 DSV designing a superior logistics and transportation solution for BMW South Africa Rod Baxter (BMW) and Sinti van den Berg (DSV) 1 DSV - Johannesburg, 10 October 2017

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4 The BMW Lifestyle experience

5 Traditional vs BMW Supply Chain What does this mean for a logistics partner? Manufacturing Primary Transport Primary Longer Storage travelling distances with shorter lead times Lower market price expectations with higher operational cost drivers An agile operational footprint with a rigid pricing structure Predictable serviceability Secondary for a volatile Transport market and consumer footprint SIMPLIFIED TRADITIONAL SUPPLY CHAIN VS BMW SUPPLY CHAIN Consumer Retail Channels Last mile delivery Secondary Storage

6 Companies don t compete, supply chains compete Delivery Culture Innovation Skills Creating Competitive advantage Sustainability Relationships Investment

7 Centralized distribution to all Gauteng dealers BMW Supply chain requirements All product types Including windscreens, tyres, body shells and engines Variable consignees Price per delivery stop Variable Volumes 2 rush order daily deliveries per dealer (3 hour SLA) Night time stock deliveries PREDICTABILITY RELIABILITY SPEED PRICE Punctual take over of deliveries without delays Prompt notification of delays Price valid for 6 years Daily deliveries at the same time by the same vehicle Minimal transport damages

8 Problem approach Optimized Solution Data availability Realistic Operation Solution Options Sustainable business

9 Optimized Solution Engineering method applied: Mathematical programming (Operations Research) Vehicle Routing Problem Tool used: Network Analyst created by ESRI Cost drivers to be minimized: 1. Number of dedicated vehicles 2. Number of staff 3. Travelling distance 4. Working hours 5. Overtime hours 6. Specialized operational equipment 7. Miscellaneous costs and overheads Cost drivers to be minimized: 1. Orders 2. Depots 3. Routes 4. Route replenishment cycles 5. Route seed points 6. Driver breaks

10 What was the final outcome? Shareholder impact 21% reduction in vehicles Only 4% increase in travelling distance per route 29% network agility for fluctuating volumes 1.5% organic growth allowance per annum Site staff double as vehicle assistants Only vehicles with tail-lifts

11 98% on time in full service delivery What was the final outcome? Management & Stakeholder impact Several technical meetings were conducted in order to get to the final co-operative solution 6 year contract period allowed for staff conversion from labour-broking to permanent employees The fixed cost structure and extended contract period effectively saves BMW SA up to 36% in CPI increases over the total contract period National delivery within a maximum of 24hours while running a centralized model Europe runs on same SLA base but with decentralized warehouses for outlying areas.

12 What was the final outcome? Environmental impact Carbon emissions impact over 12 month period 33% difference Network Type Traditional shared network Optimized dedicated network Total kg CO2 emitted

13 In summary Mathematical modelling methodologies were used. Employees are a pivotal asset. Short lead times over longer travelling distances while remaining competitive on pricing, predictable on delivery and agile on capacity.

14 Thank you!!