Automotive packaging manufacturers are among the most important links in the supply chain in this industry. It is a highly competitive industry, where the slightest mistake can cost millions of dollars and the loss of a significant portion of the market share.
A Complex Closed Logistic Loop
Why is automotive packaging so important that the Logistic Packaging team decided to draw attention to it specifically in this article? After all, the e-commerce era has affected all industries. The reason for it is the specific nature of automotive manufacturing processes.
This is a world unto itself, with a close logistic loop. Let’s think about a recently sold brand new car. How did it get to exist and be delivered to the client? First things first, a team of designers and engineers designed the model. It was approved at the central headquarters of the automotive company, somewhere in Western Europe, the USA or Japan.
Then, the approved suppliers of the car maker received orders to start producing the various parts which make up the whole car. These suppliers are located in South-East Asia, and, more recently, in Northern Africa. Each of them delivers a specific part: the doors, the drive train, the dashboard, etc.
Some of these parts require further assembly between each other – at a specific location. Then all the parts go to the assembly line facility and the car is put together. All these operations have one thing in common: specific automotive packaging, for each part, each pre-assembled component, until they are finally joined together in an automobile.
The Impact of E-Commerce on Automotive Packaging Supply Chain
People are no longer in a hurry to change their cars. They prefer to maintain and upgrade them. This is why many online stores now sell car parts and accessories – some of them for old-time, classic models, others for newer car models.
This new trend has a powerful impact on the automotive supply chain. The closed logistic loop has changed, because the approved suppliers are required to produce more parts and more components than ever. They are no longer supplying only the end assembly line, but also these online stores that sell the parts directly to car owners.
The higher production demands require a supplementary batch of specialized automotive packaging. Caring for, accounting for and, ultimately, making use of these packaging materials efficiently makes the difference between future success and failure in the automotive supply chain.
Here are just a few considerations for industry specialists to keep in mind:
1. Do You Really Ship as Many Products as You Can?
Car parts range from the very small to the very large, from the very light to the very heavy. Using adequate automotive packaging materials for each of them is the key to packaging efficiency.
If your VDA-KLT boxes are more empty than full, you are losing money. If your ESD crates are too small and you have to force pack items, they will be damaged without a doubt. If items which should be protected from scratching and dust rub against each other inside the container – you get the point. Using the right packaging materials and the right division systems to maximize the use of container space is essential.
2. Do You Focus on Mitigating the Most Expensive Losses?
When you think of logistic losses, you probably think of items damaged during transit. However, have you considered the true proportion of your logistics costs? Here they are:
- 60% shipping
- 20% labor
- 15% packaging materials
- 5% product damage.
Thus, working on mitigating solely the issue of product damage will solve only 5% of your losses. Automotive packaging is highly specialized and expensive – but it is built to last for a long time. You should implement stricter rules concerning how to care for and maintain your batch of packaging.
3. Space, the Final Frontier
If there is a type of space that is truly worth its volume in gold, that is warehouse space. The principle of maximizing container usage space must be extrapolated to the warehouse. Do you use the right configuration of shelves? Do you apply a consistent labeling policy to implement FIFO consistently across all product lines? Do you use space saving automotive packages, such as foldable Galia boxes and stackable ESD EURO containers?
As you can observe, there are complex debates and difficult choices ahead for car parts producers, not just in connection with automotive packaging, but also with their entire strategy to adapt to the demands of e-commerce shopping.
At Logistic Packaging you will find reliable and high quality automotive packaging materials, as well as expert advice on how to implement them in your company. Send us an email or schedule a Skype video call and be ready to face the future of e-commerce supply chain.