AutoMOTIVE 5 - (Page 92)

ecg.qxd 24/11/06 12:21 pm Page 92 A DIALOGUE CONFERENCE REPORT OF THE DEAF The recent annual conference of the European Car-Transport Group of Interest ECG , focused on flows and productivity. The increasing cost and price pressure on both OEMs and logistics service providers is a major concern which must soon be addressed. Brussels-based ECG, a non-profit-making organisation Produc tivity must improve to address dwindling founded in 1997, groups together the 70 leading margins, said ECG president, Kay Hanns Ewaldsen. This European vehicle logistics companies. Its members can only happen through a joint effort between OEMs and operate in the distribution, transportation, handling, logistics service providers. preparation and processing of finished vehicles The outbound automotive logistics sector is being hard throughout Europe. ECG's primary aim is to represent the hit by the combined effect of two factors. Firstly, the interests of the sector to the various EU institutions, but it continuous pressure on rates, due to the stiff competition also facilitates collaboration between member companies between car manufacturers and its consequent drip- and assists them in the development of areas such as down to the logistics operators. Secondly, the constant Training, PR, Quality and Procurement. rise in service providers' direct costs due to the increased This year's ECG conference, held in Vienna, had as its prices of fuel, energy and personnel. Add to this the fact theme `Flows and Productivity'. The shift in car production that the logistics process has become significantly more away from traditional Western European nations towards complex with fewer opportunities to optimise traffic flows the East and South-East of the continent, and the over- and cost efficiency due to shorter lead times and irregular capacity of vehicle assembly plants, particularly in Central volume flows. The end result is a vicious circle which has and Western Europe, results in unbalanced flows and already seen the demise of some operators. Small causes difficulties in the strategic development of companies are disappearing, said Frits Mehrtens, ECG vice president. Either that or they are leaving the car-carrying efficient, long-distance logistics. The building of business. production plants in the new member-states of the EU There is a pan-European shortage of rail wagons, car may well have the effect of reversing the major streams transporters and ships, particularly along the East/West from being primarily West to East into becoming East to axis. The very real need for fleet renewal is being stymied West. by the operators' inability to generate the necessary The prime requirements of the OEMs can be summed investment funding. The situation is such that OEMs, up as speed, damage reduction, cost reduction and the unable to buy from the logistics providers because of lack protection of the brand promise. The finished vehicle of availability, are resorting to the spot market for logistics sector is beset, however, by consistent cost and transpor tation, where prices are anything up to 100 price pressure which inhibits its ability to combat rising percent higher. This is evidence of short term low-price labour and fuel costs, resulting in declining margins and tactics to the detriment of a long term quality strategy. an inability to fund much-needed investment in assets. 92

Table of Contents for the Digital Edition of AutoMOTIVE 5

Editors Note
Here For The Long Haul
Halewood. Rebirth of a Car Plant
Safety First
Focus on Flexibility
A Prophet Without Honour?
Chrysler Cuts It Four Ways
A MINI For All Reasons
Porsche Plans Continuous Logistics Improvement
Flawless, Consistent Execution
Ford's European Supplier Parks Deliver Lean Manufacturing Efficiencies
Cheap and Cheerful
Onwards and Upwards
Schrader and Siemens Electronics Assembly Systems Take the Pressure
No Faults Forward
A Long Way From Wheelbarrows and Bath Tubs
A New Era in US/Japanese Cooperation
A Dialogue of the Deaf