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Information about nyBrazeau

Published on April 14, 2008

Author: Techy_Guy

Source: authorstream.com

DaimlerChrysler Logistics Rail Outlook:  DaimlerChrysler Logistics Rail Outlook Marc A. Brazeau Manager, North American Logistics Integration DaimlerChrysler Corporation Tuesday September 16th, 2003 Slide2:  2 ﴀ C H R Y S L E R G R O U P Procurement & Supply Motivated Employees Lean Processes Aspirational Products Customer Focus Shareholder Value “Disciplined Pizzazz” Quality Cost Technology Supply LEAN PROCESS STRATEGIES Suppliers adapt to delivery requirements defined by World Wide Supply, NAFTA, & GSC Strategy Chrysler Group Goals Slide3:  ﴀ C H R Y S L E R G R O U P Common Understanding Vision - “Shaping the world’s most effective supply chain” Customer Focus Objectives Guiding Principles Supply backbone process sets framework for interaction Within DaimlerChrysler With Outside Customers Enablers IT Performance Measurement Human Resources DaimlerChrysler Supply Strategy Slide4:  The Supply Backbone is the common process model of DaimlerChrysler Supply. DaimlerChrysler Supply System Key Measures in the Automotive Logistics:  Key Measures in the Automotive Logistics Quality Vehicle Damage Frequency Cost Material Cost Management Technology Insight Network Logistics Supply Vehicle Transit Time System Cost & Supply Technology & Quality Resource Repair Reward Repair E D Logistics Industry:  Logistics Industry Overall Logistics and Transportation Expenditures are down to a record low as a percentage of GDP 46% Decline Cost:  Cost MCM target is an 18.8% reduction in Logistics cost through 2003 Total Supply Cost Reduction of 31% per unit 2001 through 2006 Rail Industry:  Rail Industry Intermodal volumes have increased 11.1% since 1999; 5.8% last year alone. Intermodal opportunity: strengthening economy truckload capacity service improvements The Transportation sector represents 8% of total rail freight revenue Rail and intermodal provide a cost effective alternative to traditional transportation for the automotive industry +5.8% DCX Parts & Materials Transportation:  DCX Parts & Materials Transportation 2002 Logistics Expenditures % of Spend 70,000 part shipments per day Daily, we unload 7700 truckloads 140 rail cars +30% from 2001 Network Optimization – Chrysler Group:  Network Optimization – Chrysler Group Value-added partnerships provide strategic solutions Collaboration of multiple service providers (Ryder, CSX, Union Pacific, TFM) provides lower cost alternative unique to DCX. Over 50 direct suppliers plus RILC material launched on stack train. 18% savings: $14.2 million. Collaboration of Strategic Partners North and Southbound Stack Train DCX Finished Vehicle Logistics:  DCX Finished Vehicle Logistics 2002 Logistics Expenditures % of Spend Ship 11,000 vehicles per day – Over 2.5 million vehicles in 2002. 75% of all vehicles move via rail during their route from manufacturing point to dealer +6% from 2001 Slide12:  Critical Factors for Vehicle Delivery Process Technology Standardized Launch Planning Increased Carrier Base Extended Enterprise CAPS Modeling VIN Vision VIN Logic Route Optimization Asset Planning Performance Measurement Supply:  Supply Speed to Market & Reliability, Visibility Process Control & Continuous Improvement Visibility, Responsiveness & Customer Satisfaction Capacity vs. Demand:  Capacity vs. Demand Industry volumes in North America are projected to increase by 7% per year from 2003 to 2007 Introduction of trucks, SUV’s and crossover vehicles will impact rail car supply There is a widening gap between railcar requirements and available supply Asset Management:  Asset Management Improve transit time to reduce the gap between equipment capacity and demand Make necessary capital equipment expenditures to increase capacity of bi-levels and Q2 cars Railcar Capacity vs. Demand Network Optimization – Chrysler Group:  Network Optimization – Chrysler Group Ocean movement of finished vehicles from Mexico to east coast ramps Damage frequency reduced Transit time maintained Cost savings provided of $1.6 million per year Quality - Damage Prevention:  Quality - Damage Prevention In 2002, Railroads paid $142.4 million for loss and damage 38.8 %, or $55.2 million is attributed to transportation equipment 2002 Loss & Damage Payments by Commodity Coal, Ore, Minerals 3.3% Food Products 11.6% Chemicals 5.6% Misc. Mixed 18.1% Farm Products 8.7% Transportation Equipment 38.8% Metal Products & Machinery 3.9% Lumber, Wood & Paper Products 10.0% US Auto Market Forecast:  US Auto Market Forecast Effectively Track Funding:  Effectively Track Funding Source: Eno Transportation Foundation Hurdle rate of 10% for rail capital programs seems conservative Automotive commodity draws on capital: Line expansion Terminal capacity Asset Management Impact on captive shippers: Subsidizing modal competitive commodities Reduced leverage Investment Pyramid:  Investment Pyramid Suggests that investment is needed to satisfy volume capacity Must consider the range of commodity needs Public funding needs to be tied to: Open access Co-production Commodity parity Grade crossings, branch & commuter lines Corridor capacity, intermodal & terminals Automotive Freight Corridors:  Automotive Freight Corridors Assessment of freight corridors: Report example 2: Chicago gateway connections Report example 3: Northeast congestion Report example 5: Detroit – Mexico corridor Automotive requirements: Terminal & yard capacity Regional line capacity Dimensional clearances Plan for growth Possible Futures:  Possible Futures No Growth: Widens the gap between captive and modal competitive customers Promotes internal commodity subsidies Would force the development of lower cost alternatives Constrained Investment: Could address stop-gap capacity measures Focus would continue to be on supporting modal competitive commodities Wouldn’t support asset renewal Base Case: Would maintain current rate structure Most likely result in current service levels In light of shippers’ targets – wouldn’t eliminate the on-going need to pursue service alternatives Aggressive Investment: Promote effective capacity growth Support co-location/co-production projects Explore technological improvements The Bottom Line:  The Bottom Line Investment must satisfy railroads, shippers, and public interest Yard & terminal capacity must be expanded to satisfy volume increases Projects must promote co-production and/or cooperation Any public funding must benefit all commodities Improve Customer Satisfaction Reduce Costs to Shippers Improve Profitability for Carriers Promote Opportunity for Growth of Rail Transportation

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