Automotive should learn from e‑commerce. Through data and digitalisation.

• Digital Factory
• Interview

If you want to succeed, learn from the best. That is why we’ve interviewed Ivan Marinec, with his rich portfolio of experience from operations and logistics management in automotive. Over 20 years in this field have given him a unique perspective on the current turbulent situation and more importantly on the trend of digitalisation in automotive manufacturing. We asked him for tips as well as lessons learned that have helped him to start his own company.

What are your secret tips for operations management at a manufacturing plant? Do you think there are any ”common mistakes”?

Quite often companies invest huge sums into new advanced machinery and technological improvements, and yet they struggle with the fact that all levels of management at manufacturing plants need reliable, correct and complete data to be able to make the right decisions. How do you manage the shop floor effectively with incorrect or even missing data? It is not possible. I see this area as slightly underestimated by management – the necessity of data-collection completeness and data integrity.

Some companies declare digitalisation and Industry 4.0 strategies and targets, but frankly speaking these companies sometimes cannot use even the base functionalities of SAP. Why? Because users do not trust the data. Why? Indeed, because the data is really incorrect. Be honest here: how many of you are still receiving KPI reports in Excel?

In my opinion, there is only one direction: to start up – or support if already existing – a team maintaining SAP/MES data to improve data completeness and accuracy. There is a really good tool for this named DEEP. It collects all core data from SAP, creates data package cubes and marks missing or incorrect data. Great tool!

And my second recommendation for managers: Do not allow any reports in Excel to be delivered to your desk. Simply ban that and require KPI reports exclusively from ERP or MES. This is truly the best indicator to reveal where your company is.

Where do you see the biggest challenges or on the contrary, the biggest opportunities in current automotive logistics?

There has been unbelievable progress in the last decade, in general, everywhere. Automatisation, digitalisation, robotisation and the IoT have simply changed everything and opened up new perspectives. Those who remain analog will not survive. The future trend is obvious: all companies must rethink the way they manage indirect processes – I mean the supply chain, internal logistics, procurement and purchasing and more – they must automate, digitalise.

I’ll give an example: there is a VDA/GTL standard for transport labels. These labels are affixed to pallets normally and could be used for a firm’s internal logistics WMS too. But many companies still relabel each pallet with their own internal label during the receiving process or incoming inspection. Why do they do this? It’s expensive and prone to error by mislabeling.

Or there’s the process of freight transport ordering or the choice of a transport partner. Everyone should forget here about e-mail or the phone. Let’s make this digital and 100% compliant! It’s quite simple, and 50% less administration effort is guaranteed! Salary increases are unstoppable, so companies have to adapt their processes to new trends – to be simpler, faster and smarter.

It is always good to have positive opportunities, but to be honest, what are the current problems we face? And is there a solution?

The biggest challenge now is broken supply chains. Completely. Nowadays electronic components are the biggest bottlenecks, causing multiple production stops by OEMs and up to dozens of thousands of incomplete cars parked in OEMs’ yards.

At the same time, sea and air transportation costs have exploded in recent months. Costs for FCL (Full Container Load) are now four times higher. Lead times for some commodities are much longer. As the constraints will last many months, it is time to get parts shipments under control via the implementation of real-time monitoring of the shipments. You cannot be “blind”; you must be able to have full shipment control. This is becoming a MUST for overseas shipments now.

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Ivan Marinec will be one of the speakers at the Trends in Automotive Logistics 2021 conference, which will take place on 21 September 2021 in Pilsen. Get more tips on data and digitalisation. Book your place today!

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What are usually the most common challenges your customers are facing?

There has been a significant decline in the number of car launches, due to legislative pushes for massive CO2 emission reductions and less than 100% unity and clarity in the opinion that electric vehicles alone are the future of Europe. The lifetimes of car lines are being prolonged, and new model launches are being delayed. This uncertainty complicates resource planning in the project management of many Tier 1 and Tier 2 suppliers.

As a solution for our customers, we propose full or partial outsourcing of project preparation to an expert company with qualified professionals.

Another aspect that is gaining in importance is increasing complexity. Our customers must manage and plan many more items, products and technologies compared to the past. This is due to the fact that OEMs are increasing the number of cars in their portfolio but reducing the average number of produced units. I’ll give you an example: The Skoda Octavia was initially solely assembled on the assembly line in Mlada Boleslav in a volume of 1,200 cars a day. Now that assembly line is shared with the Enyaq; that means the line produces only 800 Octavias plus 400 Enyaqs as an addition. For Tier 1 suppliers, this means increased complexity. And more complexity means you cannot handle that with a pen and a paper. It means you have to digitalise to remain effective and competitive.

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We can probably agree that we learn the most from our mistakes; do you have anything you’ve learned in this area? Do you have any examples of an “ah-ha” experience?

I have always been considering the supply chain and logistics in automotive as the highest standard for other industry and service areas. The never fading effort to make the process robust enough, extremely shortened delivery times, process synchronisation – this still remains excellent.

However, I am really fascinated by the sector of e-commerce logistics right now. Tremendous progress has been made in the past years in terms of process digitalisation, warehouse process automation and transport planning and monitoring. I think that we all are impressed by the way e.g. Alza is doing its business or how quickly Rohlik delivers food to our homes. E-commerce is showing us that there is always room for process improvements. Hats off.

Let us (the automotive fanatics) adopt the e-commerce mindset. At least in something.

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Ivan Marinec
Managing Partner, AIM PARTNERS

The managing partner of AIMPartners and automotive logistics and an operations expert with more than 20 years of experience in the field and specialising in data and its accuracy – but also working with SAP, MES, Asprova and much more. He began his career at Skoda Auto in their Pre-series Logistics department, and continued to Saint Gobain as a logistics manager. At Magna, Ivan Marinec acted as the head of logistics, and later operations manager and plant general manager. After leaving Kostal Group and the position of operations technical manager, Ivan started his own company providing interim and project management and a consultancy focusing on the supply chain, logistics and shop floor processes.

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