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LFA Automotive Supply Chain

LFA Automotive Supply Chain

The LFA Automotive Supply Chain project provides the logistics audit technology of Logistics Field Audit™ for companies operating in the automotive industry. Implementation of the logistics technologies within the auto parts supply chain management enables essential cost reductions, making the business processes more effective, increasing the quality of services and consequently, increasing market share.

 Automotive Supply Chain
LFA Automotive Supply Chain is a project aimed at implementing Logistics Field Audit™ technology within the automotive industry. While elaborating this project, special attention was paid to the peculiarities of the supply chain in automotive businesses:

  • large amount of SKU’s (more than 100 thousand);
  • variety of logistics parameters (size, package,
    weight, etc.);
  • limited replaceability of the original spare parts;
  • identification difficulties and errors;
  • warehousing peculiarities;
  • singular piece orders picking;
  • irregular cycle of purchase, long-term delivery;
  • OEM quality control;
  • specific features of reverse logistics;
  • peculiarities of planning.

 Achievement of Clarity in the Supply Chain
The LFA process studies the three major sources of uncertainty in the automotive business Supply Chain and allows for the determination of the optimization process of the logistics functions.

Supply uncertainty. This could result from poorly performing suppliers or an inability of a company to `order` auto parts efficiently. This can be evaluated by looking at supplier delivery performance, time series of auto parts orders placed, call offs, deliveries from suppliers, lead-times, supplier quality reports and auto parts stock time series.

Demand uncertainty. This type of uncertainty is associated with a specific customer in relation to schedule variability. It is an indication of how well the company meets its customers’ requirements. Developing a time series of customer’s auto parts orders, call-offs, auto parts deliveries and forecasts identifies this uncertainty.

Control uncertainty. This affects the company’s ability to manage its activities and to transform customer orders into supplier requests to deliver. It can be investigated via the time series of customer requirements for auto parts and supplier requests for auto parts to deliver to a workshop or a point of sale.

 LFA Technologies for Automotive Business
LFA Quick Scan
– is an intermediate cost effective logistics tool aimed at diagnosing an automotive company’s immediate areas for logistics improvement. The process takes about twelve days and logistics auditors involve themselves in understanding a general overview of the auto parts supply chain, logistics operations and logistics costs. At the end of the Quick Scan the automotive company receives a list of initial improvements to be implemented and LFA can put these into practice.

LFA Full Audit takes the investigation of a automotive company’s logistics operations to a higher level. What is unique about LFA is that the LFA logistics experts are incorporated into the client’s supply chain management structure for between two and three months. Through this methodology the full picture of the auto parts supply chain within the structure can be evaluated, including hidden logistics costs across departments and hidden logistics value added. At the end of a Full Audit it is expected that far-stretching efficiencies and economies will be put in place, of immense value to the running of the client’s operations and costs.

LFA Warehouse Perfect – a complete set of solutions for optimal management of auto parts stocks. LFA-experts can assist in designing an optimal auto parts warehouse structure, developing warehouse operational schemes, developing requirements for warehouse equipment and its suppliers, and installing warehouse management systems. In addition, they can help to create organizational charts, to develop and to document the functional responsibilities of staff, and to monitor the launch of warehouse operations.

LFA Complete IT Solutions. LFA experts offer automotive companies assistance in choosing optimal logistics software (Russian solutions, adopted Western systems, integrated logistics blocks of ERP system), and assistance in developing the requirements for creating customized in-house logistics software solutions.

 Effectiveness in the Auto Parts Supply Chain
The implementation of LFA technologies will result in increased effectiveness of the logistics function of an automotive company:

BenchmarkImprovement
SalesUp 10%-40%
Order ProcessingDown 20%-60%
Demand Satisfaction95%-100%
Direct Logistics CostsDown 20%-40%
Stock TurnoverUp 30%-75%
Planning EffectivenessUp 20%-60%


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