BMW delivers a considerable amount of parts for the BMW Brilliance plants in China from Europe. There are three main types of transportation: ship, train and airfreight. The more time the transportation takes, the higher is the risk of shipping too many or not enough parts. In the first case, the surplus parts might have to be scrapped, in the second case the missing parts might have to be transported by airfreight or lead to production loss due to unavailability. Both cases cause additional costs which should be avoided if possible.
Given several parameters like transportation costs, part costs and probability of having too many or not enough parts, the optimal transportation mode (Sea-, train- or airfreight) should be chosen by optimization.
flexis AG is now providing a solution to BMW Brilliance: a Mode of Transport Optimization Application for an optimized selection of mode of transport for regular sea, train and air transport creating an optimized transportation mix of sea, train and air freight considering required basic load for capacity requirements of all transport means, a stable transport planning in advance, minimization of transport cost and optimized utilization of each transport mode.
The objectives of the application are:
- Achieve an optimum of transport cost from a mix of sea-, air- and train-Freight
- Avoidance of airfreight of non-regular airfreight parts in case of supply backlogs
- Reduction of airfreight for parts possible to transport by air or train
- Avoiding of stock obsolescence and scrap cost resulting from technical change and forecast-demand-deviation of run out parts
With this small optimization solution BMW Brilliance expects to achieve a significant reduction of logistic costs for transport and parts obsolescence as well as stockkeeping.