creating a sustainable supply chain

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  • Creating a Sustainable Supply Chain

    The Cargo Show MENA 2015Dr. Igor Egorov

    by Dr. Igor Egorov

  • To Be Covered:

    Automotive parts SC intro

    Challenges ranking

    Ways to SC sustainability

    Sustainability by SC professionals

    Ways to SC sustainability

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Highly complex logistics Thousands suppliers

    Dozens thousand customers

    Millions of SKUs

    Global yet localized

    Parts - profitable business

    20-30% of the revenue 30% net profit (capital good industry)

    US automotive aftermarket = $318.2 billion (2013)

    Right part, right time, right place at lowest cost

    Full speed while looking at rear mirror

    Automotive Parts SC

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Triad markets Central Logistics CentersSecondary: Mixed 2PL and 3PLLarge markers, partially with own production: 3PLLogistics hubs: 3PL

    Dubais automotive spare parts trade: AED 37 billion

    Automotive Parts SC

    The Cargo Show MENA 2015Dr. Igor Egorov

  • 1. SC visibility 2. Risk management 3. Cost containment 4. Customer demands 5. Globalization

    Challenges Ranking*

    * Reference: IBM Automotive SCM Study The Cargo Show MENA 2015Dr. Igor Egorov

  • Sustainability for SC Professionals

    43% - cost reduction

    35% - environmental impact

    25 % - customer satisfaction

    PwC, PwCs Global SC Survey

    Cost

    Enviroment

    Customer

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Elements of SC Sustainability

    Redesigned logistics

    Warehouse management

    Obsolescence management

    Product compliance

    Customers protection

    IT

    People

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Redesigned SC

    Transport management Reduce air shipments

    Consolidation

    Avoid unnecessary transshipments

    Reverse logistics

    Partners with sustainable policies

    Localization: Oil move manufacturing from US to

    Oman

    Batteries to UAE

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Warehouse Management

    Reduce energy cost: AC schedule, day-light, solar power

    Smart packaging, not shipping air by air Packaging re-use World Class Logistics policies reduce waste Automation and Productivity Interconnected inventory management

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Obsolescence Management

    Supply chain visibility

    End-to-end inventory planning

    Strict shelf life monitoring at each SC point

    Scrapping environment certificate

    The Cargo Show MENA 2015Dr. Igor Egorov

  • Product Compliance

    Automotive parts - high risk

    (as per customs authority):

    SASO

    KUCAS

    EGYPT ECE Brake pads (asbestos free)

    Chemicals

    Oils

    Batteries

    etc.The Cargo Show MENA 2015

    Dr. Igor Egorov

  • Customers Protection

    Government agencies request wider inventory

    Heavy fines

    Additional costs - airfreight & inventory

    Disruptions in SC

    High customer expectations

    The Cargo Show MENA 2015Dr. Igor Egorov

  • ICT: great servant, bad master

    Global networks impossible without IT-support:

    ERP, WMS (Warehouse), TPS (Transport), SCM

    50%+ of logistics systems outdated

    3 of 4 companies systems weak

    Significant investments

    * Reference: Study of Aachener Institut fr Operations Research und Management GmbH (Inform)

    The Cargo Show MENA 2015Dr. Igor Egorov

  • People

    Support educational needs

    Motive staff, incentivize improvements & environment initiatives

    Measure managers not only on

    cost savings, but on sustainable factors

    The Cargo Show MENA 2015Dr. Igor Egorov

  • THANK YOU

    The Cargo Show MENA 2015Dr. Igor Egorov

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