Magna Steyr | Automotive & Aerospace

Holistic optimization of logistics in the automotive industry

Magna Steyr
In cooperation with Magna Steyr Fahrzeugtechnik, Know-Center has developed a comprehensive simulation and visualization environment for the automotive industry that identifies cost driver within the logistics process and creates proposals to optimize costs across divisions.

The logistics process in the automotive industry is on the interface between the specialist areas of purchasing, materials planning, transportation, and materials management, which have very different goals and compete against each other. While purchasing aims to achieve the most favorable purchasing conditions possible, depending on the component’s production and delivery lot sizes (large delivery quantities), materials planning is responsible for low inventory levels (small delivery quantities). Transportation focuses on maximum truck utilization for these components (large delivery quantities and low transportation costs). The materials management’s costs are in turn determined greatly by delivery quantity and frequency. Improving the supply process holistically for each supply plant therefore proves complex.

Visualize and optimize the entire supply chain

Within the scope of the project cooperation between Know-Center and Magna Steyr Fahrzeugtechnik, a sophisticated methodology was developed to analyze and optimize cross-divisional supply costs.

„We have developed a logistics tool together that illustrates the entire process including its interdependencies and consequentially generates the supply process’s total cost optimum.“

Gerhard Grill-Kiefer, Head of Total Cost of Ownership Projects at Magna Steyr Fahrzeugtechnik

In addition to a comprehensive simulation and visualization environment, complex algorithms are used to determine the costs for each process step individually and enable a thorough view on the entire supply chain’s cost components for each supplier plant. Based on this, proposals are created to reduce costs. They form the basis of a collaborative decision-making process.

„If the transit time for selected supply plants is extended to three weeks, for example, the storage costs and the tied-up capital will increase, but overall costs can still be reduced. The project will reduce cross-divisional supply costs and consequently achieve positive climate effects in terms of CO2 savings.“

Stefan Schröcker, Technology Manager at Magna Steyr Fahrzeugtechnik

The project was funded within the framework of COMET – Competence Centers for Excellent Technologies by BMK, BMDW, Land Steiermark. The COMET program is managed by the FFG.