Innovative logistics concepts

Innovative logistics concepts: The pull-flow principle at Frauenthal Automotive

As strategic partner to the commercial vehicle industry, Frauenthal Automotive offers innovative logistic concepts. One of these is the pull-flow principle, which has been successfully applied over a period of more than one and a half years at the Châtenois spring factory for a European truck manufacturer.

True to its role as an innovative partner, Frauenthal Automotive has set itself the objective of enhancing customer benefit. At the request of a European commercial vehicle manufacturer, the pull-flow principle was put into operation at the French spring plant in Châtenois in October 2012 and has proven to be a success. "For ambitious projects such as this one, Frauenthal Automotive is the right, reliable partner. We are able to offer customers substantial added value through the pull-flow approach", emphasises Matias Mosesson, the CSO and CTO of Frauenthal Automotive.

Reduced storage costs and flexible production
The project was driven primarily by financial aspects, such as reduced stocks and thus less tied-up capital as well as minimised costs for storage and transport. Moreover, the customer had set itself the goal of reducing storage space, in order to make room for manufacturing facilities, and improving production flexibility. In the pull-flow approach, the value stream is organised on the basis of the flow principle, which warrants continuous and smooth manufacturing. Production begins only when the customer places an order or whenever the defined minimum stock level is reached. From the customer's perspective, products are 'pulled' through production instead of being 'pushed' into manufacturing on account of planning specifications. As a result, 100% on-time delivery is achieved.

Supplier warehouse in customer's immediate proximity
Customer no longer need to pick up the products. Instead, Frauenthal Automotive moves the components to a supplier warehouse – known as Supplier Advance Warehouse (SAW) – which is located only a few hundred meters from the customer's production line. Along with Frauenthal Automotive, another 19 suppliers have opted to store their components there. Minimum and maximum stock levels are defined, so no storage costs are incurred as long as stock levels remain within this range.

New IT solutions
This complex project had a lead time of over a year. Lots of coordination meetings were held, both with the customer and with internal staff in the most varied functions. Each and everyone needs to be absolutely familiar with the entire process, from raw material procurement to delivery of the finished product to the customer. The adaptation of the IT system was a major challenge that was necessary to warrant effective communication and the data exchange with the customer and the SAW. In order to meet these new standards, Frauenthal Automotive has created new SAP modules.