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Renault - Direction de la communication / Corporate Communications November 4, 2010
THE SUPPLY CHAIN, A VITAL COMPONENT IN RENAULT
The purpose of the supply chain is to deliver vehicles to each customer, respecting Renault quality standards, on time and at the best price. It sequences the movement of parts from suppliers to plants and the movement of vehicles from plants to dealerships. It also serves to program production levels at plants while optimizing inventory levels in line with sales demand.
The Global Supply Chain Department, DSCM (Direction de la Supply Chain Monde), was set up in 2008, replacing the Logistics Department, with a view to optimizing Group performance. The DSCM has decreased late deliveries by 30% in the last two years. Damage caused by transport operations has fallen considerably, with observed defects decreasing 40% between 2008 and 2010.
The DSCM has also generated major reductions in costs. The global cost of the supply chain fell 9% between 2006 and 2009. In 2010, Alliance synergies are expected to save €130 million for Renault and Nissan.
During the crisis, the DSCM drastically reduced stock levels, through continued reprogramming of production at sites. In addition, logistics – concerning physical shipments – was pooled with Nissan through the Alliance in order to identify, produce and share synergies. The supply chain continues to prepare for the future by developing its working relationship with Nissan through the Alliance.
1. The remit of the supply chain at Renault: a cross-cutting, global function 2. Significant progress in the last two years
3. An essential role during the crisis
4. The Alliance as a source of economies of scale and synergies 2
1. The remit of the supply chain at Renault: a cross-cutting, global function The Global Supply Chain Department, DSCM, was created on a request from Carlos Ghosn in 2008, replacing the Logistics Department. The numerous tasks carried out by the department are vital to the Group’s overall performance.
The DSCM is responsible for meeting commitments on lead times and contributing to customer satisfaction, against a backdrop of increasingly international trade. While logistics previously was treated as something of an afterthought at the end of decision-making processes, today it is factored in right from the start of vehicle design.
Following the “Design to Logistics” principle, the supply chain works with engineering to design parts that are easy to transport.
The DSCM also works with the Purchasing Department to optimize sourcing, i.e. the origin and transport of components bought from suppliers, the choice of which can have considerable impact on transport costs and logistics solutions.
It draws up production forecasts together with the Sales and Marketing and Manufacturing departments. These forecasts are refined weekly at production sites in order to deliver cars to customers on time while keeping stock levels to a minimum.
The DSCM works with Sales and Marketing to establish reasonable and reliable lead times for end customers.
Lastly, with the Quality Department, it ensures that components and vehicles are delivered on time and in compliance with Renault quality standards.
Given the importance of these tasks, the DSCM plays a major role in Group performance. Significant progress has been made over the last two years.
2. Significant progress in the last two years
The DSCM has achieved considerable progress since it was created in 2008. At management level, it has become a major player at the company. The department’s recommendations are taken into account by the functions it works with and it has implemented standardized processes ensuring effectiveness and efficiency. Renault Logistics Way (SLR or Système de Logistique Renault) –...