A new partnership between a global Tier 1 auto supplier and a logistics company demonstrates how critical the push for greater supply chain efficiency is as manufacturers try to speed up the movement of parts and materials to customers.
Marelli — the Japanese-Italian supplier of electronics, lighting, advanced driver-assist systems and powertrain solutions — has signed a five-year service agreement with logistics provider DHL Supply Chain in a project to accelerate the movement of its materials and finished products.
Seeking to drive efficiency at a lower cost, Marelli believes it will reduce its customer delivery times by introducing new visibility tools, real-time inventory tracking and tracing for customers from DHL, said Bharat Vennapusa, head of transformation for Marelli North America.
“When we look at the complexity, to bring everything under one supply chain organization, it has become a top priority for us, especially under COVID in the past year, to know how to manage it,” Vennapusa told Automotive News. “And we needed a faster response time.”
Before choosing DHL, he said, the organization had to determine what it most needed to accomplish. And the answer was clear. “Obviously,” he said, it was “the speed at which we respond, cutting through all this complexity.”
To get under way, DHL’s digital supply chain management will expedite Marelli’s transit of goods to customers as a regional pilot in North America.
Marelli eventually hopes to expand the DHL partnership globally to include other pieces of the logistics challenge, including warehouse management.
Marelli expects it will get better visibility through coordinated freight bidding and volume management, and improve saturation rates by using single-source suppliers. At the same time, eliminating multiple carriers should help it cut shipping costs, Vennapusa said.
“Marelli’s expertise is in product knowledge and manufacturing; we’re not logistics experts,” he said. “DHL’s bread and butter comes from logistics. … We want speed and momentum while we are transforming the company, and we think you do that through partners.”