Attività

The UK automotive parts supply chain has been transformed by the emergence of e-commerce and the changing behaviour of car owners. Online parts sales are growing at a rate of around 10.5% a year (CAGR) compared with 3% for the whole UK aftermarket and, according to the Society of Motor Manufacturers and Traders (SMMT), online parts and accessories sales will be worth around £1.65 billion by 2022. These figures suggest manufacturers need to get into the e-commerce mindset and meet consumer expectations to avoid losing out on a sizeable revenue stream.

Far too often, packaging is viewed as a commodity, but in fact it is a critical component of manufacturers’ supply chains, as it determines how much space is needed in warehouses, how much damage products will experience during shipment and, as a result of e-commerce, how valued customers feel when they open the box in which the auto part was delivered. The value of packaging – and its impact on manufacturers’ marketability and supply chain efficiency – must not be overlooked.

Typically, package delivery costs consist of: freight (60%); labour (20%); packaging materials such as corrugated cardboard and dunnage (15%); and damage (5%). Companies tend to focus only on reducing packaging material costs, even though they could achieve more significant savings by concentrating on the other 85% of costs. To do this, manufacturer stakeholders should conduct a value analysis to determine the true financial and supply chain efficiency savings that can be generated if each type of cost is reduced.

To ensure automotive manufacturers find the right balance between packaging speed and protection, a four-pillar approach to packages should be considered: minimising damage; maximising packaging productivity; right-sizing boxes; and ensuring that unboxing is easy and pleasing. By implementing lean principles into packaging operations, these pillars can increase manufacturer productivity by up to 30%. This uptick in productivity can lead to a trickle-down effect, as manufacturers will typically require 15-20% less labour per package, figures that will directly influence their bottom lines.

As freight costs continue to rise because of limited trucking capacity, mainly resulting from driver shortages, manufacturers must ensure that all packages feature more products than air (box cube minus product cube) before they enter pallets or trucks. After all, only 65% of trucks and pallets – if filled with manufacturers’ packages – are utilised, as 35% of each box is composed of unfilled space.