Overview

When manufacturers look for responsiveness in the supply chain, logistics transporting vehicles from the assembly plant to the dealership or even directly to the final customer tends to be overlooked. The process seems straightforward. You ship the vehicle from point A to point B. What has to be flexible?

But in a build-to-order system, everything links, and logistics is about linking the whole production chain to the dealers and ultimately the customer. To not do so can have a considerable effect on the cohesiveness and responsiveness of the supply chain. Renault is a case in point. In 1998, Renault started its build-to-order project, Projet Nouvelle Distribution, with the goal of a 15-day order-to-delivery time. Apart from initial problems, mainly what to do with the stock of new vehicles still in the market, the project was going very well. The stock in Europe decreased quickly and sharply, and executive vice-president Pierre-Alain de Smedt announced a reduced expenditure of 513 million in the first 6 months of 2001 at the Frankfurt Motor Show. We re economizing in logistics, reducing stocks, shortening delivery times, and simplifying the entire delivery chain, ^[1.] he happily reported.

Yet in late 2001 Renault had to revise its order-to-delivery target to 21 days. We haven t managed the 15-day lead time, said Francois Hinfray, Renault s senior vice-president for sales and marketing. In 2001, only 21 percent...