The proliferation of advanced driver assistance and convenience technologies and the resulting growth in the number of high-unit-value components in new vehicles is changing the way that supply logistics is used by the automotive industry. Premium freight, traditionally used only as a contingency to safeguard existing operations, is now being factored in to delivery schedules of high-value components to allow vehicle manufacturers to offer their customers a wider range of options than is possible with traditional stockholding. The risk of delay or damage in transit is also reduced compared to conventional freight methods.
“We have recently been commissioned to provide bespoke premium freight solutions for the delivery of high-end screens for the latest head-up displays,” says Brad Brennan, managing director of emergency logistics specialist, Evolution Time Critical. “Where premium freight has previously been cost prohibitive for initial logistics scheduling, the combination of component value and an increased awareness of the true cost of supply chain failure has seen vehicle manufacturers integrate the service in the first instance.”
Brennan continues: “The use of high value premium components is becoming more commonplace and we expect this increased uptake to drive the continued evolution of automotive industry logistics, where the focus on robust delivery systems is intensifying. The desire of increasingly sophisticated customers to see high-tech features matching the interior ambiance of vehicles will in time filter down from premium manufacturers into the volume market and this will in turn gradually increase the need for premium freight delivery systems; we are already finding customers call upon our services in situations where time is not quite so critical, but when our level of control and communications ensures the efficient supply of higher volumes of costly components.”
The emergence of premium freight as a distribution channel for high-cost components such as head-up displays is in parallel to trends in component quality previously identified by Evolution Time Critical. In this case, customer quality expectations are leading vehicle manufacturers to stipulate improved component quality, which in turn translates into a higher rejection rate on the production line and places added strain on Tier suppliers and buffer stocks.