Audi’s senior logistics executives are working on further improving the transport efficiency of the carmaker’s ‘new logistics concept’ (Neues Logistikkonzept, NLK) – a system designed to synchronise the supply sources based on stabilised production programmes. One key figure of this new process is the development from the current consolidation centres to cross docks. However, Audi believes that it will be a challenge for current logistics service providers to meet the standards for such an operation.
NLK refers to an ongoing logistics project to support the Audi production system. According to Dr Ernst-Hermann Krog, executive director of brand logistics (pictured), when that system was renewed three years ago it focused on minimising the movements made by workers to retrieve material on the assembly line (known as the “worker’s triangle”), which meant clearing more stock away from the line to a ‘supermarket’ and moving material to the line in smaller batches.
Now Audi is moving the NLK line back to its suppliers so that they may become more integrated with Audi production. This involves improved information exchange and a sophisticated transport system to maintain the efficiency of deliveries, which will now typically be smaller and more frequent. “We are making much effort to bundle our material to ensure a optimised utilisation of our transportation network”, Krog told Automotive Logistics, in an interview at Audi’s Ingolstadt site.
“Currently, Audi is using a European network of consolidation points to combine material volumes from across the VW Group and then move in full truckloads to the plants,” said Jens Tilgner, Audi’s head of inbound transport logistics.
However, the objective is to use group-wide, cross-dock facilities that will be more numerous and closer to suppliers, allowing both suppliers and Audi a higher amount of flexibility in manufacturing. In theory such cross docks would cut the lead time from suppliers while at the same time ensuring full truckloads. Jens Tilgner added, “A cross dock in the future is really intended to move the supply chain for the assembly line back to the suppliers, in a continuous flow over just a couple of hours”.
Krog describes the NLK as more a “refinement, rather than a radical change”.
Audi relies on its in-house logistics competence
The NLK requires much from an LSP, including delivery discipline, an integrated IT system with Audi, as well as the ability to effectively manage a complex network of cross docks. But Krog and Tilgner revealed that the challenge would be in finding the providers that are up to the task.
“I think at the moment there are a limited number of logistics service providers in the market that really have this knowledge in practice,” said Tilgner. “The challenge for the future will be the integration of the NLK processes with our LSP on a day-to-day basis.
“We have a clear idea of how to run a cross dock, and we have a clear focus on how the operations should run,” he added.