Thursday 29th Oct 2020 - Logistics & Supply Chain

Mercedes-Benz sets out multi-million euro logistics investment

Mercedes-Benz Cars division has opened a new consolidation centre in Speyer in the south west of Germany – part of a multi-million euro investment in its global logistics organisation.

It has invested €90 million in the centre which consolidates production materials from European suppliers and initiates the transport to its production plants in China, the US, and South Africa.

The opening of the centre is part of a new strategic approach that involves the integration of the global Supply Chain Management unit into the central production organisation at Mercedes-Benz Cars reporting directly to divisional board member Markus Schäfer.

Schäfer said: “Logistics plays a key role for our company’s success. Our objective is to gear our supply chain management organisation towards growth and to make it even more efficient and flexible. This approach marks the next logical step in our global production strategy.”

In line with the “Mercedes-Benz 2020” growth strategy, Mercedes-Benz Cars is expanding its global production and supplier network close to customers and markets. Mercedes-Benz expects the planned increase of unit volumes to lead to a significant expansion of merchandise flows throughout the global production network, especially at plants outside of Germany. The increasing product complexity resulting from a larger number of engine versions and personal customisation options, for example, are putting an additional strain on logistics operations.

The investment at the Speyer site is designed to respond to this. The company is considering setting up similar consolidation centres in the upcoming years, notably in growth regions like China and NAFTA.

The global Supply Chain Management unit, which employs some 7,500 people is managed by Alexander Koesling, head of supply chain management at Mercedes-Benz Cars. The unit’s responsibilities include:

  • planning and managing the global production programme,
  • ensuring the production capability of Mercedes-Benz Cars locations through the delivery of required materials – including on-time deliveries of supplied parts and components from suppliers and MBC facilities to the target plants (inbound logistics),
  • securing the supply of materials and material flows to the stations where the parts and components are installed within Mercedes-Benz Cars vehicle and powertrain plants (intralogistics),
  • and managing the global transport of new vehicles from manufacturing plants to customers around the world (outbound logistics).

“We create the necessary conditions for on-time production at our plants. Our investment of several hundred million euros in our Supply Chain Management organisation will optimise 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,” said Koesling.

The Speyer consolidation centre

When it becomes fully operational in 2016, the Speyer consolidation centre will ship several hundred sea containers every week via inland waterways or rail to Antwerp and Bremerhaven, where they will be loaded onto freighters and transported to Beijing (China), Tuscaloosa (US), and East London (South Africa).

The centre extends over a distance of one kilometre and has around 79,000 sq m of hall space. In addition, the centre includes a 21,000 sq m container yard and an administrative building.

Operational logistics at the centre – the transhipment of supplier materials from trucks to containers – is managed by Syncreon, which employs around 400 people in its on-site operational material transhipment and administrative units. Transport specialist Contargo, in turn, is responsible for transferring sea containers to trucks and then transporting the containers to inland waterway or rail transhipment centres.

Up until now, logistics service providers in Bremen were solely responsible for managing shipments of materials from German and European suppliers to the major Mercedes-Benz plants abroad. Thanks to the new consolidation centre in south-western Germany, deliveries from European suppliers south of the Main River will no longer have to be shipped over long distances, which will significantly reduce the logistics costs.

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