We wanted to create a supply chain where we had minimal day-to-day involvement from JLR.
The contracts mean that WWL, working with its sister company, Eukor, will now take responsibility for the complete JLR supply chain from its UK port of loading to dealerships across China. This port-to-dealer supply chain service, which is unique to WWL, is seen as a model for future logistics operations, especially in emerging and new markets.
The new logistics agreement is a key component in a major reorganisation of JLR’s sales and distribution activities in the country and comes as the company plans to more-than double its previous exports, with a 2011 target of 40,000 vehicles a year.
In order to support this expansion JLR has created its own National Sales Company, switched to RoRo freight rather than container vessels and cut its number of entry ports in China from four to two, giving greater efficiency and better quality through WWL-run Vehicle Processing Centres (VPCs).
The new business was won by WWL in a competitive tender process as Martin Flynn, JLR Vehicle Distribution Manager with responsibility for China, explains:
“What we were trying to achieve was a repeatable, reliable service from the UK to China with a provider who also had experience of moving premium product around China to the dealerships. They also had to be ‘comms savvy’ and able to be connected to our systems.”
Flynn says the ideal solution from the JLR standpoint was to be able to give both the ocean transport and the inland contract to one provider who could be accountable for port-to-dealer management.
“We wanted to create a supply chain where we had minimal day-to-day involvement from JLR,” he says.
A further factor in winning the contract was WWL’s willingness to invest in the future of the business by creating two new VPCs in Shanghai and Tianjin. This investment means WWL is able to offer high quality discharge, preparation and storage services including customs clearance, local content fitment and pre-delivery inspections on all vehicles passing through the ports.
Bryan McCausland, WWL account manager in Shanghai, says: “What we’re offering in China, in terms of port to dealer, is unique and adding the ocean transport creates a much more unified process which could bring great benefits with all customers.
“It means we’re able to prepare capacity in China to match production in the UK and, we believe, it’s crucial to getting future supply chain management right – not just from the UK but from all global markets.”
Over five years of experience with premium car manufacturers in China means WWL is able to offer high quality operations with local joint venture suppliers.
“Our local contractors are fully aligned with the quality standards needed to bring premium vehicles into this market,” says McCausland. “They make sure the amount of care they get in China matches the care that was put in at the factory, all the way through the supply chain.”
And that chain can get quite long, even at the delivery end. The furthest JLR dealership in China is around 4,000km from the discharge ports, resulting in a land journey of 12 to 15 days during which time both the cars and the delivery transporters must be kept in perfect condition.
Keeping track of the vehicles with “end-to-end visibility” of the supply chain was a pre-requisite, according to Martin Flynn at JLR. Integration of reporting systems on a standard format means JLR is able to know the precise location of any car and its delivery date, anywhere from Southampton to the furthest dealership.
The reporting function, now based on WWL’s global WITS operating system, also allows tracking of a number of key performance indicators, such as dwell times, which will be used to measure and improve the service in the future.
John Speakman, WWL account manager for JLR, says: “You can’t underestimate the challenge that was thrown at all of us, including our logistics partners, to make this work. In a couple of months, volumes jumped from 200 units a month to 1500 units a week.
“The business really did start with a bang and the pressure on all of us to deliver was phenomenal. It’s a great testament to our people on the ground but we recognise the real work starts now as the volumes continue to increase.
“JLR is a major global customer for us and, as you would expect, they are quite demanding. But, as with all our customers, we work with them; that’s the secret of a successful long term relationship.”
An important factor in that relationship, according to Martin Flynn at JLR is “WWL’s balance of good local people supported by an experienced international team”.
He sums up the success like this: “We went from inception to implementation in seven months on a project halfway round the world. We’ve got a weekly RoRo service from Southampton with a single provider and, against target, we’ve reduced our lead times. We successfully supported the launch of JLR China.
“There are still challenges ahead, but I’d say we’ve ended up with a good result.”
WWL IN CHINA
■ WWL has invested heavily in China under our strategy of ‘global reach, local knowledge’. As a result the group can offer high quality import, storage and logistics services in one of the world’s fastest growing economic regions.
■ WWL has offices in Beijing, Dalian, Guangzhou, Shanghai and Tianjin and has invested heavily in the ports of Shanghai and Tianjin which are seen as vital hubs for a comprehensive logistics service to automotive and other H&H (Heavy and High cargo) customers.
■ The company has three modern, fully equipped Vehicle Process Centres which are capable of high quality local fitment, pre-delivery inspection and storage. They are located close to the ports of Haitong (for Shanghai), Guangzhou and Tianjin.
■ Equally important, by operating in China since (2006)?, WWL has built up extensive joint-venture partnerships with trusted local support companies that allow it to offer a unique, high quality ‘port-to-retail’ logistics service.
JAGUAR LAND ROVER
■ Jaguar Land Rover is the UK’s leading manufacturer of premium luxury vehicles and one of the global motor industry’s most dynamic companies. Worldwide annual sales rose in 2010 by 19 percent to reach 232,839 vehicles, and China was the fastest growing single market, up by 95 percent over 2009.
■ Earlier this year Jaguar Land Rover signed a Memorandum of Understanding that details its intention to sell more than 40,000 new Jaguar and Land Rover vehicles in China in 2011. The Memorandum, which was signed in London in the presence of Chinese Vice-Premier, Li Keqiangand UK Deputy Prime Minister, Nick Clegg, reiterates and supports Jaguar Land Rover’s long-term commitment to the Chinese market.
■ Jaguar Land Rover currently builds its two iconic brands, Jaguar and Land Rover, at three factories in the UK. Last year the company acknowledged it was interested in manufacturing vehicles in China and would be opening discussions with the relevant parties to progress this plan.