5 Common Logistics Mistakes and How to Avoid Them
Deloitte recently released a report on The Future of the Automotive Value Chain. Meanwhile, ridesharing and other trends threatening the traditional automotive industry could lead to a 2% drop in North American car sales by 2025.
Improving logistics strategies is the top method automotive industry players are using to thrive despite these threats. That’s why we’re bringing you this guide to the most common logistics mistakes OEMs need to combat for success.
So, keep reading for the top five logistics mistakes OEMs makes and how to avoid them.
1. Insourcing Logistics Operations
Up to 90% of the Fortune 500 uses third-party logistics (3PL). With, Fortune 500 automotive industry players alone account for $52 billion in 3PL spending.
Cost, efficiency, and economies of scale are driving OEMs to outsource. It may be time to consider a 3PL strategy if you want to harness these benefits.
2. Deploying Disparate Logistics Systems
You have multiple locations around the country and even the world. To clarify, that means each location may be using disparate systems. This hamstrings your logistics— systems that can’t cross-talk require costly integrations and customizations.
Instead, choose a one-stop-shop system with an ERP, CRM, and PLM built-in. Therefore, if that’s not possible, shop for out-of-the-box products built to work together seamlessly.
3. Lacking Real-Time Reporting Capabilities
Accurate supply-demand forecasting tops the list of most OEMs’ worries. Without real-time reporting, it may be near impossible to forecast precisely.
Real-time reports not only improve visibility into logistics operations but also provide a measure of productivity. Using more precise KPIs, you can harness process improvements you may have been blind to before.
4. Failing to Identify Operating Risks
Failing to identify logistics risks is one of the most significant causes of damage to any company.
Lucky for you, top OEMs publish their logistics operations risks in public annual filings and regulatory reports. Learn from the mistakes of your betters, and you’ll be on the way to out-competing them.
5. Choosing the Wrong Suppliers
Choosing the wrong suppliers can make or break your delivery schedule. How do you avoid costly delays? By performing the proper due diligence on prospective suppliers before you sign the deal.
For instance, here are our tips for finding the best automotive suppliers:
- Make sure each prospective supplier is comfortable with and capable of bi-directional communication with you
- Make sure all prospective suppliers are comfortable communicating with each other
- Map out your supply chain and identify any critical or unique needs your suppliers will have to accommodate
Once you close the deal, you’ve got to establish relationships. While your formal relationships are vital, don’t forget about the informal relationships that drive loyalty and keep the supply chain secure no matter what the economy throws your way.
Don’t Fall Victim to These Common Logistics Mistakes
In today’s uncertain automotive economy, you can’t afford to make these common logistics mistakes. Therefore, that’s why you need Mayco.
So, are you searching for the best Tier 1 supplier in the business? You’ve found us. Get in touch with Mayco today to learn more about our manufacturing capabilities, plus how we can help your logistics strategy succeed.