Watch: Rivian's Dan Schwartz on providing an "Amazon-like experience" for EV service parts logistics
Dan Schwartz, senior director, global distribution operations - commercial at Rivian, discusses how service parts logistics differ for EVs and ICE vehicles, as well as what distinguishes Rivian from traditional OEMs.
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Service parts logistics is an integral put often overlooked part of the automotive supply chain. Speaking on the Red Sofa at Automotive Logistics and Supply Chain Global, Dan Schwartz, senior director, global distribution operations - commercial at Rivian, discusses what goes into creating an exceptional service experience for customers, how EVs differ from ICE vehicles when it comes to service parts and how Rivian is working to maintain high standards of customer experience while the company continues to grow and expand.
EVs vs ICE vehicles
The service parts logistics experience inevitably differs from vehicle to vehicle, but the most significant changes can be seen between EVs and ICE vehicles. "When customers are coming in to get their vehicle serviced, especially in the EV world where we don't have as much maintenance as ICE vehicles, it's typically not a happy event," Schwartz noted, explaining that something has gone wrong to get to this point and the team then has to work to resolve any issues and create a good experience for the customer.
"Service parts is a critical part of this, simply because people don't want to wait two, three, four, five days – maybe even weeks at a time – for backordered parts" he continued. "So providing that Amazon-like experience, getting material forward, distributing it to our service centres, to some of our collective partners in the 3P world to be able to repair those vehicles quickly creates that great experience."
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Touching on the unique pain points of EV service parts logistics, Schwartz identified some of the difficulties that can often be associated with batteries, but notes that EVs don't have as many serviceable parts. "We don't have your traditional drivetrain which an ICE vehicle would have, so we have a lot less of the small nuts, bolts, screws, spark plugs – these types of things that are maintenance or just smaller commodities," he added.
As a result of this, Schwartz pointed out that firms manufacturing EVs, unlike ICE OEMs, tend to deal much more with larger parts, such as doors, batteries and drive units. Therefore, the warehousing and logistics aspect of the EV service parts supply chain must be adequately set up to manage larger units being shipped.
Providing an example of such a consideration from a supply chain management perspective, he explained that automation such as automatic storage and retrieval systems, while effective in warehousing operations where smaller parts are being stored, cannot properly the large and heavy service parts typically needed for EVs.
A different approach to aftersales logistics
Schwartz emphasised the importance of ensuring customers have a positive aftermarket experience, and the need to stay competitive in terms of cost as well as to ensure material availability in order to provide this high level of service. "When your vehicle is down, you just want it repaired," he said, acknowledging the cruciality of an agile supply chain to respond quickly to customer needs.
One thing that makes Rivian stand out from the market is that it doesn't follow the traditional dealership model, and this brings about new opportunities. "I think one of the great advantages we have is the service centres, our traditional dealership model, are within Rivian, so we get a ton of insights," he shared. "We're fully integrated from a systems standpoint, we're fully integrated from a processes standpoint and then we can go out and be pretty involved in what's actually coming into the service centre."
He explained that this access to such detailed and relevant data allows Rivian to be much more proactive in getting parts to its customers.
Economies of scale and managing growth
"I think the biggest challenge for us is just the scale of our business," Schwartz shared. "We're growing rapidly and with that growth we're trying to provide great customer experience while expanding our network, expanding our systems, expanding our processes – all those types of things – and building truly foundationally from the ground up, from square one."
He acknowledges that Rivian deals with some pains in getting to its customers as quickly as possible because its network is not as large as some bigger legacy OEMs, reiterating the importance of flexibility in today's market and the role that having the right partners can play in this. "We at Rivian really aren't looking for transactional partners; we want people that are going to help us become better as an organisation," he stated. "We still have a ton of ways to grow and so we really need that support."
