Rolls-Royce reduces transport costs with new logistics system

Engine manufacturer Rolls-Royce has reduced its transport costs by 6% after introducing a logistics system, delegates at next week's AMR Research Supply Chain Conference in London will hear.

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The deployment, implemented by logistics firm TNT, helped Rolls-Royce to overcome a lack of visibility and control of inbound shipments, which was leading to shortages of production materials.

Ian Shellard, director of global physical logistics at Rolls-Royce, said the system had improved reliability and flexibility.

The project entailed a bespoke combination of central applications, on-vehicle technology, and interfaces with Rolls-Royce's SAP enterprise resource planning system. Packaging and labelling adherence, supplier compliance, interfacing of technologies, driver training, and standardisation of processes were all part of the programme, Rolls-Royce said.

Supply chain best practice guide

• Include stakeholders. Working collaboratively goes beyond sharing data. Share ideas and screen the technology options and approaches with your trading partners.
• Align incentives and compensation with goals. Getting organisation and the process right is key, but also address the incentive structure to align with new goals.
• Demand intelligence must be driven through the organisation. Understanding demand is a good starting point for being market driven, but it is not enough. Successful supply chains use the sales and operations planning process to drive demand intelligence.

Source: AMR Research