Look Beyond Your Borders for New Ideas: TDG’s MacGregor

Despite different approaches to building and distributing vehicles, European and North American automotive manufacturers can learn from each other to create more efficient operations and supply chains.

That was the message John MacGregor, TransDevelopment’s president, delivered to nearly 200 attendees of the annual Autologistics Europe conference held in Montreaux, Switzerland.

MacGregor noted that infrastructure and transportation needed to support the flow of parts and finished vehicles are markedly different in Europe than in North America.

In Europe, manufacturers rely almost solely on truck transportation, while car makers in North America rely more heavily on rail transportation – especially for finished vehicles.

At the same time, land is more expensive in Europe, which creates barriers to develop the larger-scale, North American-style logistics parks and vehicle processing centers.

Because of certain constraints imposed on European manufacturers, OEMs throughout Europe have developed greater flexibility to administer and manage third-party logistics contracts. Car makers from around the world can learn from those best practices, said MacGregor.

“Some of the European approaches are more sophisticated than they are in North America, especially in the area of integrating logistics and sequencing centers,” he said. “Manufacturers in Europe and their logistics partners have moved more of their operations off the assembly lines to create efficiencies. New assembly plants in Europe blend fully integrated logistics centers into their operations.”

Advanced European supply chain management practices also benefit finished vehicle shipments. The idea of a “stocking center,” with a managed inventory level, is an idea that has only been used on a trial basis in North America, where the traditional “push” model is still dominant.

“There is a real opportunity for new or modernized facilities in Europe that retain the idea of a well-managed “stocking center,”’ said MacGregor, “while adopting North American and other global best practices in the areas of rail terminal development, yard layout, truck circulation and perimeter security.” MacGregor cited recent case studies in facility development work for Jaguar Cars in the UK.

In his concluding remarks, MacGregor encouraged the audience to think about advantages that Europe has in the global automotive economy. “Europe enjoys strong internal communications both on land and with short-sea transportation to distribute vehicles to leading markets,” he said. “In addition, Europe has superior links to large areas of Eurasia and portions of the Third World.”

MacGregor noted that the other major auto production regions in East Asia and North America do not enjoy the central geographic location that Europe does.

The other presenter on the Beyond Europe panel, Claude-Abel Morin, directorate general for Energy and Transport, European Commission, spoke about the need for Europe to diversify its modal-mix of transportation. He said major increases in roadway congestion and rising costs will encourage European shippers to consider alternatives to trucking. He commented that increased rail transportation and short-sea shipping links could meet the needs of shippers while removing costs from supply chains.

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