Robin Delius, Vice-President - Supply Chain Management at Benteler Automotive, on the logistics behind the restart of the Benteler plants, current challenges, lessons learned from the crisis and what the Corona pandemic has to do with a domino game.
Before the Corona pandemic, your job was to secure the supply chain. Then we had a temporary shutdown, now everything has to be restarted. What is your biggest challenge now?
Right now, supply chain management is a challenge. The situation is highly dynamic; the information we have to work with is sometimes vague. A lot is restricted by country-specific regulations: Transport, travel, up to export restrictions. In our highly connected world, this requires exact planning and at the same time a lot of flexibility. For me, the biggest challenge in this situation is to ensure the availability of material.
Benteler supports the automotive industry with tailor-made solutions. It supplies to around 80 car makees and sources material from almost 4,000 suppliers worldwide.
What are the difficulties here?
We are supplying about 80 different car manufacturers. For this purpose, we purchase material from almost 4,000 suppliers worldwide. When the car manufacturers began to shut down their plants, it was like a domino effect on the entire supply chain. Now the restart is our common task. The challenge lies in the various country regulations on how this resumption should look like. You have to find out which suppliers could theoretically deliver again from when, and thus play the chain backwards up to the customer. Then the customer can set up a plan as of when he can get the plants running again.
The whole industry must therefore restart jointly. Who is coordinating that?
In Germany, for example, we have the Association of German Automotive Suppliers, which invites both car manufacturers and suppliers like us every week. They exchange information on what requirements there are and how we can supply each other with data even better. Since the end of April, we have been ramping up the BENTELER plants again because customers in Europe are able to predict the way they want to produce, at least for the next two to three weeks. This is not yet the case in America. The automotive industry there is heavily dependent on suppliers in Mexico. In Mexico, however, production has been temporarily stopped because the coronavirus is currently developing still dynamically.
In Germany, too, stricter measures can be taken again at any time if the number of infected persons rises, ranging from border closures to temporary shutdowns.
How can the supply chain nevertheless be secured?
If we expect a supply bottleneck for certain materials, we have several options. We often have platform products that are produced globally - they can be produced in one of our plants in Europe as well as in China. So if necessary we supply ourselves. Alternatively, we try to find solutions together with the customers. With their support, new suppliers can be found for our purchasing department. Often we do not only purchase material from one supplier - if one of them is not available, we can try to compensate for this with others.
How long will it take until production returns to normality?
Our customers in Europe are planning the ramp-up within the next six weeks and want to get production back to the pre-crisis level in the summer. That’s an ambitious goal. The temporary lockdown has reduced demand. Car manufacturers cannot yet resume production the same way they shut it down a few weeks ago, because they have to take every precaution to protect their employees. In terms of customer queries, it is a very volatile environment. But I expect that we will reach a stable level by the end of June.
What are your lessons from the supply chain management perspective regarding the crisis?
Communication is even more important in these times than usual. I am grateful to our customers because of their transparency and openness when facing challenges together. Internally, we are currently talking to the plants on a daily basis, the plants with the region, the region with us as a corporate function. In the matrix, everyone is in contact with the purchasing department and the Business Units. Everyone must know what's going on so that we can jointly decide when, where and how to act.
This also applies to the highest level. Regular crisis meetings have been taking place since the beginning of the Corona pandemic, where our CEO Ralf Göttel, the Management Board of the Automotive Division and the Executive Vice Presidents of the Business Units and regions exchange information. In the beginning, meetings were scheduled daily, now twice a week.
All of that sounds like a lot of work.
My days are long at the moment. But I'm not alone in this. What the regions and plants are currently going through is a huge effort. And when I see how hard the colleagues in the other departments are working to get everything up and running again, I'm sure that we will succeed.
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