Analysis and Design of a Supply Chain Logistics Hub for After Market Automotive Parts Distribution

Abstract

Developing global logistics strategies has become essential for ensuring enterprise profitability. As a case in point, the Taiwan automobile manufacturing industry is improving logistics operations and enhancing product traceability using integrated distribution hubs. After-Market Services (AMS) are critical for automobile part suppliers since they are required to satisfy their clients while providing on-time deliveries that are traceable on route. Offering these parts and services requires re-engineering the enterprise and integrating the processes with information systems located across the channel and around the world. This research depicts the current AMS logistics and management processes for an automobile lamp and components manufacturer. The case studies the current logistic process (e.g., shipment tracking, inventory management and order processing) and depicts the underlying business processes using Petri net diagrams. After using simulation to study bottlenecks, repetitive processes, and areas of operation that waste time and money, a to-be model is developed. The goal of the to-be model is to apply information technology to exchange and share information among supply chain participants. In order to benchmark the design of the to-be logistics model, the simulation is run and compared to the current operations. Although the research does not attempt to optimize the model, simulation runs on the to-be model are repeated until an improved solution is achieved that satisfies the manufacturer\'s goals. The results show that an information technology based logistic hub increases logistics efficiency and better enables the manufacturer to increase profits.