Transportation managers in the OEM industry face a number of significant business challenges when it comes to shipping. Globalization, older vehicle fleets on the road and increasing complexity of vehicles, parts and components mean that OEMs are having to ship more and smaller shipments to more places than ever. That means more parcel shipping – a challenge in a business that once relied mainly on parcel freight.
These challenges have led many transportation and logistics managers, as well IT teams, at OEM manufacturers to search for solutions that can simplify their shipping operations and reduce the human cost of executing a multi carrier shipping system.
The question is, how to handle these new requirements? Some OEMs opt to cobble together a solution to manage their shipping needs by customizing their existing ERP or Transportation Execution applications or by purchasing a parcel shipping software add-on. But in a rapidly changing industry that’s notorious for competition and low margins, maintaining these kinds of ad hoc solutions is expensive and inefficient. That’s why finding a solution that meets all these needs should be a high priority for OEM manufacturers.
Here are three reasons OEM manufacturers should centralize their multi-carrier and express shipping with PRECISION Multi Carrier and Enterprise Shipping.
Since the 1970s, the OEM industry has become increasingly global in nature. Over the last decade, auto sales in the BRIC countries grew from 30% to 60% of the global automotive OEM profits. McKinsey predicts that emerging markets’ share of global sales will rise from 50 percent in 2012 to 60 percent by 2020.
For OEM manufacturers, that trend toward globalization means a shipment of parts may now be bound for anyplace in the world. This affects which carrier you choose to handle your shipments. You might choose a large global carrier like UPS or DHL to ship parcels globally, or you might be using a smaller, regionally based carrier that serves more specialized markets.
With so many carriers to choose from across the globe, manually researching and selecting carriers or building a custom solution that can do it for you is costly and labor intensive. With PRECISION Multi Carrier and Enterprise Shipping, you get access to real-time data and can compare shipping rates from more than 500 global carriers, including Tier 1 global carriers like UPS, FedEx, DHL or Yellow Freight. You select the rates and routing options that are right for your business, anywhere in the world.
Our multi carrier shipping software also integrates with your existing ERP and Transportation Execution systems to ensure visibility across your entire global parcel shipping and freight business.
The aftermarket parts sales business is growing steadily, estimated to have risen 3.4% (CAGR) per year between 2014 and 2017. This growth is giving rise to a second challenge for OEMs face when it comes to managing shipments: increasing variability in the nature of the shipments you’re sending.
In the past, the OEM business centered mainly on sending large shipments of parts to distributors, who then handled the logistics of moving those parts to those who needed them. This involved moving primarily heavy freight shipments, which is what the Transportation Execution systems many OEMs use were evolved to do.
But today, as vehicles stay on the road longer, repair parts are becoming a more significant part of your business. That means a higher volume of small shipments, more paperwork, and more pressure to keep costs down.
You still need to send large freight shipments to distributors and dealers in major markets. But today OEMs also need to send smaller numbers of parts (or hundreds of them) to repair shops and fleet managers who could be located anywhere in the world.
These types of shipments are also time sensitive, since they are most likely required to repair a vehicle that’s already broken down and waiting for parts to arrive. This is especially true in a Vehicle-off-Road situation: if that vehicle is revenue-generating, every minute counts. The urgency and need for speed inherent to the OEM business today means that express parcel shipments are going to be an increasingly important part of your shipping business.
These two business requirements combine to create a challenging environment for OEMs when it comes to managing your shipping business. Precision Software helps OEMs face these challenges. We have more than 25 years of experience working with automotive manufacturers and OEMs, so we understand your business.
Our solutions integrate seamlessly with the solutions most automotive manufacturers use, such as GT Nexus, Oracle Transportation Management (OTM) and Transporeon, as well as more than 500 carriers around the world. We can help you integrate solutions and leverage the investments you’ve already made, while positioning your business to meet the growing need for cost-effective and timely parcel shipping, regardless of the carrier you’re using or where on the globe your shipments are headed next.
Your needs have changed. The multi carrier shipping system you choose to meet them must change as well. Whether you’re shipping to Motown, Munich or Mumbai, whether you’re sending one part or a pallet, you need a solution that can simplify and streamline your operations. PRECISION Multi Carrier and Enterprise Shipping is purpose-built to manage all of your shipping needs—whether parcel or pallet freight, domestic, regional or international—all from a single platform.