Mercedes-Benz Invests 90 million euro to Rev Up Supply Chain

From Supply Management, Published on 31 July 2015

Luxury automaker Mercedes-Benz is to open a new global logistics center as part of a multi-million pound investment in its supply chain and logistics operation.

The car manufacturer said the €90 million (£64 million) “consolidation center” in Speyer in Germany would increase the efficiency and flexibility of its supply chain.

It said increasing product complexity resulting from a larger number of engine versions and personal customization options, were putting an additional strain on logistics operations.

The center, to be fully operational by 2016, will be operated by specialized logistics service providers, who will consolidate supplier shipments for deliveries to three major Mercedes-Benz plants in China, the US and South Africa. The company said the investment was part of a strategic realignment process and its “Mercedes-Benz 2020” growth strategy, which will see the company expanding its global production and supplier network close to customers and markets.

The new strategic approach is a result of the growing demand for local suppliers in these regions, and the increasingly strategic employment of regional suppliers for global deliveries of production materials, the company said. It added its global supply chain management unit has been integrated into the central production organization at Mercedes-Benz.

“We create the necessary conditions for on-time production at our plants,” said Alexander Koesling, head of supply chain management at Mercedes-Benz. “Our investment of several hundred million euros in our supply chain management organization will optimize logistics throughout our global production networks. By reducing our logistics costs per vehicle we will improve our competitiveness, since logistics have a major impact on our overall cost position.”

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