Delegates at last week’s Automotive Logistics Global conference in Detroit learned about the latest changes being made at the carmakers, including GM and Chrysler, and how technology was transforming the supply chain and providing greater visibility in the delivery of vehicles from the factory to the dealerships.
GM’s Anthony Clevio, operations manager at GMNA and Intercontinental Logistics, revealed that big changes were underway at the company to enhance the quality of information made available to dealers via its Autowork bench application.
Clevio said that previously the system was only able to show a limited number of events in the vehicle delivery process: when it left the assembly plant and when it was due to arrive at the dealer, leaving a two-to-three week timeframe inbetween.
“The big change that took place last year was to include all of the logistics events in our workbench applications for our dealers,” said Clevio. “They can now see every movement of the vehicle from the factory to its delivery, including the handling and the carrier that is associated with it.”
The next change will be to introduce what Clevio called a “dynamic ETA”, to give the dealers enhanced accuracy on the arrival of the vehicle.
“Today the dealer has visibility about where the vehicle is but they don’t have an ETA and it is certainly not dynamic, so that is our next big step,” he said.
Clevio said that the push to transform the visibility of the delivery process would be driven by the fleet side of its business, where accurate delivery information is more important than the retail side of the business.
“They want the asset in service as soon as it gets to the dealership,” he said. “If they don’t know when it gets there, they have to react accordingly and make sure it starts generating revenue when it gets there.”
Speaking for the dealers, Wes Lutz, president of the Michigan Automobile Dealers Association, said accurate delivery information and a reliable ETA was crucial and can mean the difference of making $800 gross profit per vehicle or not.
“I’m assigned to move cars at a certain pace and if we don’t have reliable information it makes a huge difference to our financial business model in the dealership,” he said.
Lutz said there were lags in the system with periods up to five days without notification, which is a problem for dealers with 30-day sales programmes.
“We receive really good reports right now showing where our vehicles are... but they are just not accurate,” quipped Lutz.
The efforts to remedy this lack of accuracy now being made include information about damage.
“This year we have set up a damage prevention group in vehicle operations to focus on more accurate and timely way of knowing firstly when the vehicle is going to be delivered to the dealer and how it is delivered, including transport damage awareness,” said Chrysler’s Erika Mercado-Gratton, damage prevention and claims manager.
When Chrysler receives notification of delivery, that notification is already between two and five days old according to Mercado-Gratton. Chrysler is now working on enhancing its electronic proof of delivery to answer when and how the vehicles are being delivered, adding greater visibility to the last leg of the delivery process.
Mercado-Gratton went on to detail how the company had recently completed a two-week trial in the Southeast region of the US and received good feedback from the carriers, dealers and the drivers.
“So right now, what we need to do at Chrysler logistics is try and get more carriers on board in other regions and we are trying to get carriers on the West Coast and Midwest regions,” she said.
The need for greater visibility was part of a general but urgent need to improve performance in the vehicle-carrying segment. Chrysler’s head of worldwide vehicle transportation, Steve Tripp, stressed that innovation and efficiency would still have to play a significant part in outbound development, particularly for a trucking and rail sector that generally runs around 40% empty on average.
“Those who don’t find that extra two-tenths of a cent per mile in fuel efficiency, or don’t find more backhaul efficiency, will slowly shrink in business,” said Tripp.
Landstar’s senior vice president of Corporate Sales Solutions, Scott Grady, added to the urgency for greater efficiency by revealing that there was a high rate of empty mileage and generally poor asset utilisation across the inbound freight network. He said that the average trailer is running 82% full.
“Back in the 1990s, 80% was the right number,” he said. “But today, with higher fuel and equipment costs, it is no longer a good enough number,” added Grady.
Carrier group set up to address operational performance
In an effort to find answers to these problems on the trucking side of the business, Bill Shroeder introduced a new carrier interest group called the Auto Haulers Association of America, which was founded two months ago by companies including Proficient Auto Transport, Amerifleet and Brothers Auto Transport, amongst others.
Shroeder, who is general manager of the group, said that the group’s mission is to promote sharing of information and the establishment of shared best practices for improved operational performance amongst small to medium-sized car carriers in North America.
He said that products and services include a website that pushes out news about trucking supplied by a comprehensive list of group members with forums to discuss issues raised by day-to-day operations and a focus on standards and services, such as driver recruitment and training, and operational and financial tools.