Supply chains are becoming increasingly stretched, leading to lean principles being diluted in the name of robustness. Is there a solution? Brad Brennan, managing director of Evolution Time Critical, suggests that a rigorous approach to emergency planning could deliver a solution.

There is no escaping lean in the automotive industry; just about every facet of a car's production process is influenced by lean principles in one way or another. The magnitude of its effects vary depending on the stage in the manufacturing flow, but it is fair to say that should defined lean parameters go “out of tolerance” at any stage the impact on schedules could be catastrophic.

Logistics has not escaped the grip of lean. Indeed it is one of the key protagonists of the philosophy in its role as the supplier link to just about every stage of production. A justified level of expectancy falls upon the shoulders of logistics specialists and it is for this reason that their procedures and methodologies must be absolutely bullet proof.

But logistics is just one link in the lean chain; a chain in which any of the links could become weak at any one time. Suppliers and their chosen logistics partners must ensure that contingencies are in place to cover supply issues and it is for this reason that emergency logistics firms have come into their own in the last few years.

Driving out cost
As a philosophy, lean is a wonderful idea. The whole concept of having what you need, when you need it, in exactly the right quantities makes sense in any book, financial or otherwise. But what many lean supporters fail to impart is the degree of uncertainty that can accompany just-in-time delivery processes. To make lean really work, especially when it concerns logistics, there must be caveats in place. Within a production environment, factors that influence lean processes may only be metres apart, but in logistics specifically in relation

to part delivery they maybe thousands of kilometres apart. Slight scheduling anomalies on the shop floor can often beevened out, but a delivery consignment, sat on a dockside a continent away is more difficult to cater for.

Dealing with these uncertainties has become a major issue. Most people accept that you have to take the rough with the smooth if you are to achieve the ever increasing cost savings demanded by the big automotive OEMs. It is the capability to handle the “what ifs” that will define the efficacy of a logistics operation especially those coupled to a lean environment. Emergency logistics has evolved from a knee-jerk, almost panic activity into one that is seeing itself specified more and more at the design stage of production and logistics processes. The inclusion of some form of emergency logistics is not restricted to the realm of vehicle manufacturers and their tier one suppliers: many OEMs, recognising the potential impact on their production lines, are also making the service available lower down the supply chain to ensure that tier one factories are kept supplied.

So, what does emergency logistics bring to the party? For a start, thanks to robust contingencies being available, lean can be implemented nearer and nearer the very limit of its model definition resulting in even greater cost savings and efficiencies. Aside from the business issues, emergency logistics can also bring peace of mind; but, factor this back into the business side of things, and peace of mind fosters greater OEM confidence in a supplier's ability to supply on time.

The “lean challenge” is further compounded by one of the major issues to hit the automotive industry over the last few years - the increasing geographical spread of suppliers. Gone are the days when suppliers were right on their doorsteps. Instead, many OEMs are opting for suppliers based in regions with more cost-favourable labour markets. Central and Eastern Europe is a classic example of this migration. As more and more countries join the EU, the pool of labour has increased massively, giving OEMs far greater choice from which to source their components, sub-assemblies and raw materials, without the border issues associated with these countries a few years ago. This geographical spread has one major disadvantage though; the distances now involved leave