A top car manufacturer keeps production and sales on pace despite pandemic supply chain challenges
Quick secures reliable capacity and cuts lead times in half during peak COVID
Case Study AUTOMOTIVE
When COVID-19 closed borders and grounded planes, supply chains all but came to a halt. The impact was broad and immediate – leaving companies around the world to reassess their goals for 2020 and beyond. Not the case for one of Europe’s top three car manufacturers, who committed from the beginning to keep production and sales on pace.
In the past, their standard operating procedure was based on a just-in-time supply chain – but with disruptions to both air and sea freight, this was no longer feasible. They needed a long-term solution that would give them a steady stream of inbound spare parts, including gearboxes. The objective was to stockpile as much as possible so they would have ready access to the parts they needed to keep production lines operating at full capacity.
The company’s parts originated primarily within the Shanghai area – being delivered to facilities across Europe. One of the locations was producing electric vehicles (EVs), and shipments included lithium-ion batteries. This added another layer of complexity to the logistics process as these batteries are considered dangerous goods and only a handful of airlines will transport them due to safety regulations.
Prior to the pandemic, the manufacturer had been working with Quick for time critical shipments. Based on this experience as well as the long-established relationship with Quick’s parent company, Kuehne+Nagel (K+N), they brought their challenge to Quick.
Quick began by setting up a dedicated project team, who delivered a very detailed plan for solving the problem. Plus, to handle the company’s immediate need, Quick worked with one of their airline partners to create capacity on a cargo flight to transport and deliver the first shipment of parts required to keep production moving.
Not knowing how long the pandemic and resulting supply chain challenges would last, the team was working on a creative solution for the longer term as well. At the time, most other logistics providers were searching for capacity exclusively out of Shanghai. By leveraging their local network, however, Quick was able to find a less well-known airline operating out of an airport about 900 kilometers north of Shanghai. Based on the volumes of freight the company expected to be shipping, Quick was able to secure the route and capacity at stable rates. The airline was also able to handle the dangerous goods shipments.
Working closely with parent, K+N, Quick provided a full scope of services – from route planning and booking to follow up and tracking to data for air bills and more.
Not only was Quick able to secure a reliable route for exporting a steady stream of parts, they were able to provide a lead time on delivery of parts – door-to-door from production site to plant – of around 12 to 14 days. This was roughly half of the normal delivery during peak COVID, which was around 22 to 29 days.
Quick achieved this with a well-thought-out, successful plan. Once a pickup was scheduled, Quick guaranteed uplift two days later. Shipments were collected and driven directly to the airport, where Quick handled all customs processes and documentation – which is typically complex in China.
Over the course of the 18 month-long project, the company experienced no delays and met their commitment to keep production and sales at pre-pandemic levels.