Mercedes-Benz rethinking supply chain to lower expenses image

The third largest luxury automaker in the world has decided to trim costs by lowering logistics expenses by around a fifth per vehicle – part of a larger global reorganization of its supply chain network worth hundreds of millions of euros.

The German automaker has been keen on expanding its manufacturing presence outside its German home during the last decade but has fallen off in terms of component suppliers – which are still mostly based in Europe. This means additional strain on the supply chain because of larger travels for the components – and the production system of the automaker is already in a battle to cope with record demand. “With more than 30 vehicle derivatives each built from several thousand parts, the complexity is immense,” commented supply chain chief Markus Schaefer. He added that in some lower-salary factories, manufacturing costs are already being exceeded by supply costs. The automaker opened last week in Speyer, Germany a 90 million-euro consolidation center where parts from European manufacturers are being gathered and repacked more efficiently for shipping abroad to the facilities in China, the United States or South Africa.

The company said in a statement that additional such centers might be established for growing regional markets – such as China and North America. Mercedes autos and cars for the Smart city car brand are being produced in 26 different plants around the world and the carmaker has 7,500 employees tasked to handle supply chain duties. Schaefer has reworked the company’s auto production network in the past twelve months, introducing for example the position of global manager for compact cars – built in Germany, Hungary and China – and underpinned by the MFA architecture.

Via Automotive News Europe