When a large automaker opened a new assembly plant in Texas, it wanted its key suppliers to establish operations nearby to minimize supply line disruptions. One of these suppliers, a multi-billion-dollar maker of plastic parts for automobiles, leaned on Dimerco Express Group to find and start an inbound warehouse near the factory – a solution that quickly evolved from pallet-in, pallet-out warehousing to complex 3PL value added services.
The product journey starts in inland China and ends in Central Texas in the US. Dimerco manages door-to-door transport, including plant pickup in China, ocean shipping from Ningbo, China to Houston, Texas and drayage to the staging warehouse near the auto plant. Container volumes can range from 20 to 90 containers a week. With these kinds of volumes, the automaker’s supply chain managers saw too much risk if quality problems arose and the nearest fix was in China.
A Solution to Reduce Risk
The products in question are precisely shaped plastic moldings with pre-drilled holes that must align exactly with other parts of the car. Since all of that work was done in China, if quality problems were spotted at the automaker’s factory, the reaction time to fix issues was very long.
The automaker and supplier discussed the potential to do some of that work locally in the warehouse. That led to Dimerco overseeing a light manufacturing process that combines multiple plastic pieces (raw material) into a finished SKU – about 2,500 a week on average and 3,500 per week during peak volume periods.
The assembly line includes a mix of humans, who load products at the start and perform QC at the end, and robots, which place products precisely, apply glue, and combine pieces into a single unit.
These robots are also used by the supplier at its China factory. The automated process was adopted in the U.S., with slight adjustments, to meet the automaker’s needs. Dimerco created an app within its WMS system to manage these 3PL value added services.
A recent event illustrates the advantage of locating light manufacturing and final quality control near the auto assembly plant.
A batch of product arrived at the warehouse without the required pre-drilled holes. The problem was identified and fixed locally. But prior to the establishment of the local assembly function, those faulty products would have shipped direct to the automaker, who may have experienced a line down situation if the problem was not identified quickly. Also, fines for the supplier were likely as products fell short of agreed quality standards.
Other Aspects of the Solution Drive Value
Other keys to success for this China-to-Texas solution for 3PL value added services included:
- Tech-aided drayage. With multiple carriers for drayage from the Port of Houston to the warehouse, communication had been a criss-crossing maze of emails. As a result, drivers were sometimes frustrated upon arrival that a dock door was not available. Dimerco’s IT team built a custom app that allowed drivers to accept loads and reserve delivery time slots on their mobile phones. No more emails. No more frustrated drivers. No more delays as trucks idled in the yard awaiting an available door. The warehouse also operates more efficiently by knowing exactly what inventory is arriving (based on container number) and when.
- Four services, one 3PL. Dimerco is able to offer trucking, ocean freight, warehousing and product assembly as part of an integrated logistics solution. It’s all executed on Dimerco’s global operating system, so status updates are immediate. Dimerco’s customer and the automaker enjoy real-time visibility to inventory – at rest or in motion.
- Bilingual, Mandarin-speaking customer service rep. This Dimerco associate ensures clear communication between the warehouse and its China-based customer contact.
Automaker Lowers Risk and Improves Agility
Dimerco’s auto industry customer had a vision for creating finished parts further downstream, and Dimerco’s team made it happen.
According to Michael Wagner, Dimerco’s President of Service Logistics, “Most 3PLs are not going to take on this kind of work. It’s really more of a manufacturing function, with a near-zero tolerance for mistakes.”
As a result of the solution, Dimerco’s auto components customer has reduced its total costs, improved quality, and made its customer happy. That automaker – by having access to local inventory and a built-in quality assurance team – now has a supply chain that’s far more agile with a reduced risk of disruptions.
Dimerco Express Group works with many auto suppliers to support traditional internal combustion engine cars and electric vehicles. To learn more about Dimerco’s 3PL value-added services, contact us today to start a discussion.