In an increasingly digital world, the logistics and supply chain industry is currently experiencing significant innovations. Against this backdrop, supply chain leaders and experts from Siemens, SAIC Volkswagen and 4flow gathered at the 4flow Logistics Day in Shanghai to discuss the challenges and benefits of this new development. Siemens, SAIC Volkswagen and 4flow presented practical case studies to show how digital solutions can be successfully implemented in production and intralogistics to overcome cost pressures.
Siemens’ smart solutions for new production plant design
Jing Cao, Logistics Director at Siemens Numerical Control (Nanjing), presented the smart solutions being implemented at Siemens’ newest produc-tion plant in Nanjing, China. Siemens Numerical Control (SNC Nanjing) is an integrated plant with a diverse portfolio and deep local value creation. Due to limited available space, SNC Nanjing previously rented an external warehouse, which was sub-optimal from a supply chain standpoint. Additionally, a high volume of shipments that had to be managed between various locations resulted in an unnecessary expenditure of valuable human resources.
The development of a new SNC production plant together with 4flow brought supply chain closer to production. During the collaborative design of the supply chain concept, certain key factors were established at the outset of the project to ensure a successful planning process. The project team then worked closely together with the production department to ensure an end-to-end supply chain design.
The plant was the first to use Siemens’ PLM (product lifecycle management) software for digital planning, building and operation – and intelligent automation was considered for every planning step. Based on the equipment for intelligent automation and the material situation at the plant, various processes and technology scenarios were evaluated for different supply chain activities. Jing Cao then explained how further possibilities for future optimization projects at SNC were being identified and evaluated, for example a transportation management system (TMS) to obtain full transparency about shipments or an automated replenishment rack system. Jing Cao added that such opportunities are reassessed every year based on the changing market and economy.
SAIC Volkswagen’s new approach to cost optimization for in-house logistics
For SAIC Volkswagen, the first automotive joint venture company of Volkswagen Group and SAIC in China, the task of optimizing cost structure became more and more important. The market and economic slowdown as well as a decrease in sales and a growing number of competitors presented each stakeholder with new challenges. With this in mind, Mei Jianping, Executive Director of Logistics at SAIC Volkswagen, spoke about the new approaches to cost optimization for in-house logistics at SAIC Volkswagen.
Mei Jianping first provided background information about SAIC Volkswagen’s program for reducing costs, which was designed to achieve better profit margins for the company within three years. For one of the program’s sub-projects, SAIC Volkswagen worked together with 4flow to examine cost optimization for in-house logistics. The aim of the project was to benchmark in-house logistics cost areas, identify top concepts for cost reduction, quantify potentials and evaluate overall feasibility and financial profitability – with the ultimate goal of optimizing supply chain costs and improving efficiency.
This project enabled the introduction of innovative new approaches, for example in the picking area. Automated Guided Vehicles (AGVs) were implemented to support order picking, which led to the elimination of numerous handling steps and a significant increase in overall efficiency. Put-away efficiency was also improved with the introduction of long-distance scanning processes.
Mei Jianping emphasized that the key to this type of project is managing new implementations – and that the entire team has to work efficiently to achieve quick savings.
Digital transformation – A strategic road map for smart intralogistics
Rainer Schmitz, Vice President at 4flow, presented a strategic roadmap towards smart intralogistics. His presentation emphasized that current challenges in manufacturing require a structured strategic approach for smart intralogistics setups.
Today’s challenges are becoming more and more complex and entail an increasing number of new products and product varieties, especially with the switch to e-mobility in the automotive industry. End customers are demanding more flexibility and product variety at a lower cost within a quick response period. Business models are also changing along with technological innovations, especially in the B2C field. And all of these changes are occurring against a backdrop of intensifying competitiveness due to declining growth rates, increasing cost pressures and new competitors entering the market. These are the challenges that will need to be addressed in future supply chain structures – and 4flow works together with its customers to identify significant efficiency possibilities in this dynamic environment.
4flow’s structured approach, which focuses on developing a roadmap to digitization, enables customers to achieve the solutions and results they need for their supply chain. The approach begins with a detailed analysis and evaluation of process maturity along with specific strengths and weaknesses. Based on the current situation and requirements, a digital supply chain strategy and a comprehensive technology concept and quantitative analysis are developed. In a final step, measures to achieve concept objectives are determined and a comprehensive implementation road map is defined.
“Compared to ten years ago, my view is that intralogistics can be configured and automated for each plant to directly match the customer’s needs,” said Rainer Schmitz. The challenge lies in finding the optimal technological fit for the businesses’ individual requirements.
Looking towards the future of digital supply chain projects
In a lively panel discussion following the presentations, Kai Althoff, CEO of 4flow, noted that successful digitization projects are more than merely implementing new solutions: “Digital transformation is not just technological innovation, but a solution that can be transferred to an organizational setting where it can be directly applied and experienced.” He also emphasized the key importance of mixed project teams in this context: “At 4flow, we always prefer to have a team consisting of both our customer’s team members and our own.” He explained that, in this setting, discussions can be open and direct, which is crucial for implementing measures and ensuring the project’s feasibility.
In the future, digitization projects will no longer be an option, but a necessity – and finding the right fit for a specific business will be more important than ever. As became clear in these various insightful presentations, digital transformation projects are highly individual and must be tailored to the customer’s needs and objectives. From end-to-end supply chain design to cost optimization projects, 4flow’s structured approach to digitization projects helps businesses to identify their individual strengths and weaknesses and to develop concrete measures that lead to sustainable, tangible benefits.
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