The effective management of plant yards is an important component of finished vehicle supply chains because of the constant flow and high volume of products such manufacturing plants typically handle. As a number of OEMs re-examine the balance between in-house labour and outsourced providers, many have begun to devote more of their attention to yard operations. In doing so, carmakers and their specialist yard providers are exploring questions around plant yard size, layout, processes and management systems – and particularly how these processes will evolve over the coming years.
Generally speaking, every car plant has a yard for vehicles attached to it, which can be used for a variety of purposes, including storing finished vehicles built at the plant and managing releases for distribution, as well as checks, pre-delivery inspections, and loading operations. They can also be used for the attachment or adjustment of accessories and other add-ons. Adding further to the management complexity is the period of time vehicles actually spend in the yard: while some only hold vehicles for a day or two before they are moved on by rail or truck, others function like a distribution centre for particular regions, holding onto vehicles for much longer periods until they are allocated or sent for delivery to dealers or export. Some even receive vehicles from other plants or as imports before they are allocated to dealers.
[in_this_story align="right" border="yes"]As a result of such multi-faceted functionality, it is perhaps unsurprising that yard managers face considerable operational challenges in deciding how best to store and manage vehicles. For Dennis Manns, chief commercial officer at Road & Rail Services, it is all about the data. Road & Rail handles US yard management systems for several companies including Toyota, Honda, Mercedes-Benz and BMW as well as major railways. Manns says that to properly receive and handle the hundreds of thousands of vehicles that pass through yards, there is a “clear need” to use inventory management systems to help manage the flow.
“Our customers look to our local people to ensure their product flows and that we are meeting our customers’ needs. The railcar and car-hauling equipment won’t sit around long if you aren’t utilising them to their fullest potential,” he says. “This product movement and ultimate delivery to the dealer is generally the cash trigger [for when dealers and carriers get paid]. The various stages of yard management and measurements of each step of the auto handling process must also be closely monitored.”
Manns lists time as another key challenge facing yard managers. Yard operations require well-trained employees and well thought-out processes to make sure vehicles move through them effectively.
“When challenges to the system start to appear, if not properly controlled, your time indicators could go through the roof along with your costs,” he warns.
Manns cites one example in which Road & Rail implemented a loading programme in a six-day, one-shift pattern, which added an extra day of loading to balance plant production with rail carriers’ empty rail car supply. The extra shift reduced vehicle dwell over the weekends and total vehicle storage days in the facility.
[sta_anchor id="1"]“Vehicles produced on Fridays are now loaded on Saturdays,” says Manns. “As a result, there is a cost saving for the OEMs and rail carriers through reduced vehicle dwell and increased rail car velocity, and expedited [lead times] for vehicle delivery to the customer.”
Dealing with complexityRuud Vossebeld, vice-president at software provider Inform, which offers specialised yard management systems, agrees that managers need to minimise lead times in yards. He suggests that self-driving vehicles will eventually require even fewer handlers, putting even more emphasis on moving vehicles quickly through a yard. Among other things, he suggests yard management systems will be needed to manage the movements of the cars, as well as to plan people and organise the movements of autonomous vehicles.
"Your yard solution should provide you with the business intelligence to analyse past trends and forecast future activities and enable users to work in a way that is not simply reactive to problems." - Christopher Kenmore, Vehnet
Paul Nurse, chief executive at ProAct International, a provider of supply chain software solutions used at several of the largest yards run by Ford, General Motors and others, says many of the changes he has witnessed recently relate to yard management that combines both finished vehicles and parts or containers. For example, his clients have required more services around the handling of vehicles for option and accessory installation (known as ‘upfitting’), as well as knockdown kits. He also points to increasing instances of containerisation of non-luxury brands via container racking systems – trends that have impacted on both loading techniques and the requirements of the parts supply chain. As a result, he says, parts may need to be strategically stocked at one or more locations along the supply chain, further adding to complexity.
Nurse suggests the increase in electric and hybrid variants has impacts when storing and loading vehicles. “Much of this comes down to more varied, more sophisticated and often model- or VIN (vehicle identification number)-specific processes and activities,” he says. “Yard managers are increasingly struggling with these à la carte processes, largely due to the fact that most yard management solutions on the market are very prescriptive in their processes and treat all vehicles largely the same.
“This issue is particularly exacerbated when it comes to high-and-heavy and specialist vehicles, where units are specifically configured to a client need,” adds Nurse.
[sta_anchor id="2"]He suggests that the subtleties of different types of yards are often overlooked by yard management solutions. A true end-to-end system must deal with changing routes, modes and load planning and optimisation onto rail, road and ocean.
IT-based solutionsAccording to Bill Garrett, president of logistics firm Vascor, which provides yard management services across North America for companies including Fiat Chrysler, Toyota, Hino and Glovis (for Hyundai and Kia), a number of issues facing yard managers can also originate from dealing with “multiple sources” in customer organisations – including those related to customer campaigns, quality holds, extended dwell times and outbound capacity constraints. To help yard managers, Vascor has developed various IT applications, including a mobile app, to accommodate such challenges and provide “visibility to all” on how vehicles are being handled.
“The key to managing many of the challenges is data and information being handled very quickly and efficiently, as parameters and customer requirements often change from hour to hour, so a data-rich application to manage the yard is key to success,” he says.
Such IT-based solutions have also been developed by California-based outfit PINC, which offers a cloud-based yard management and tracking solution that uses sensors and internet connectivity. Its systems use technology including passive RFID tags, GPS, optical and cellular technologies to capture and share real-time information.
For Rafael Granato, marketing director at PINC, a key challenge for automotive and heavy manufacturing companies is the limited visibility in plants during the manufacturing and assembly process, and the very limited visibility once the finished vehicle is moved off the assembly line into the yard where, he suggests, most tracking processes are either “manual or non-existent”.
“A secondary concern is with partially finished vehicles – vehicles that need customisation or could not be completed for other reasons,” he says. “Rather than hold up the line, [OEMs] will often move them to a separate part of the plant. In most cases, it takes a huge effort to find those vehicles once the missing or extra part arrives.”
One company that has resorted to IT-based solutions in addressing such concerns is Daimler Trucks North America (DTNA), which uses PINC’s advanced yard management platform to speed production, improve inventory visibility and reduce costs. “By automating trailer and shipment movements within its Saltillo [Mexico] facility, DTNA was able to improve production by eliminating inefficient inventory warehousing and movement,” says Granato.
While recognising that yard options are often restricted by the amount of available real estate, including whether layouts will be single or multi-storey, Garth Parker, chairman at ProAct International, argues that process considerations should be the “key driver” for layout decisions.
In particular, he says, it is vital to have an understanding of the process for each vehicle type and to ensure the flow through the yard involves “the minimum number of touch points and least distance”.
“The more you touch or move a vehicle, the higher the risk of damage,” he states. “If there is a prevalence of upfitting, or port- or yard-installed options, then consideration must be given to workshop size, equipment and resources – for example, having appropriate numbers of ramps and personnel for a specific throughput on any given day.”
In terms of management software, Parker’s advice is to choose “something that is not prescriptive and does not restrict the complexity or sophistication of the processes that must be applied to the vehicles”, opting instead for a system that “proactively automates the management of those processes”.
Above all, he stresses the need to seek out technologies that will readily integrate with and interpret information from in-car telematics.
“Many of the future benefits for vehicle logistics will come from the ability to listen to and generally communicate directly with the vehicle itself. It may still be some time before we see the autonomous vehicle park itself in a yard or load itself onto a railcar, but it will come, so now is the time to establish a technology that will be complementary, compatible and congruent with the new world of vehicle telematics,” Parker comments.
"How can you make the transition from now to [autonomy in 2025]? What IT systems are needed to make this work? Do you need as much space as today? Do you still need to scan?" - Ruud Vossebeld, Inform Software
A key piece of advice offered by Christopher Kenmore, chief executive at UK-based IT provider Vehnet, is to find solutions that don’t just supply records of factual data about yards, but also direct users to run operations efficiently while simultaneously “deploying data in context”.
“Your yard solution should provide you with the business intelligence to analyse past trends and forecast future activities, and enable users to work in a way that is not simply reactive to problems,” he says.
Vascor’s Garrett suggests yards be placed strategically to fit current requirements while minimising commitment, to allow the flexibility to adjust yard locations and volumes as required.
“The other area we think is missed by OEMs is the sharing of yards to offset costs and provide flexibility,” says Garrett. “With Mexico production volume coming on fast, we project a big backlog coming, with Mexican ports limited in what they can hold for shipment. Inland [sta_anchor id="3"]port yards will become more important as the volume increases across North America – hence the need to be strategic in placing and committing to yards that could potentially be shared.”
Towards an autonomous futureBret Griffin, general manager at Detroit-based Precision Vehicle Logistics, says the most efficient way to handle a shipping yard is “to keep the size of the yard to volume handled” and organise parking in geo-bays as opposed to block parking. “Processing in this fashion, using a single scan with all drivers using hand-held scanners, ensures inventory accuracy,” he comments. “Also, yard managers should challenge themselves to work with customers to develop software tools to solve problems with the use of data. In many instances, yard managers become complacent, developing once and rarely improving their process through system tools.”
[related_topics align="right" border="yes"] Ultimately, says Dennis Manns at Road & Rail, plant managers just want to succeed. That makes yard design and management critical to handling volume at plants.
“You can’t manipulate a poor facility design and you can’t hide from a lack of proper dedicated space. There is no cost avoidance if your product movement is not matching your production schedule,” he says.
“For each of these you need to have boots on the ground and a service provider that can assist you, guide you and consult with you to optimise your flow and minimise your costs. The lack of proper acreage will be an expense you pay for every day on every car. That type of maths adds up quickly on everyone’s calculator,” he states.
Looking ahead, Ruud Vossebeld at Inform advises yard managers to think about the year 2025, when he predicts that self-driving vehicles will be common in compounds.
“How can you make the transition from now to then? What IT systems are needed to make this work? Do you need as much space as today? Do you still need to scan?” he asks.
Both Paul Nurse and Bill Garrett agree that in-car connectivity and autonomous vehicles will impact the industry most in coming years. “Technologies such as Bluetooth tagging and vehicle-based wifi are likely to represent the future, enabling the use of far cheaper, non-proprietary devices and readers including tablets and smartphones. Such mainstream technologies will enable access and use by a wider range of service providers,” comments Nurse.
“Autonomous cars are coming soon and we think they will change the supply chain,” adds Garrett. “Will cars self-deliver to dealers or personal homes? Will the technology change to allow yard managers to electronically ‘connect’ to the cars for parking, maintenance and other modifications? We believe there are many advantages to be gained with the autonomous vehicle in the distribution network and we are actively engaged in being a part of this exciting future,” he says.