This is a high-level supply chain guidance for e-mobility and battery-powered vehicle companies that want to expand their operations. The case study goes over the overall process and people set up, key performance indicators (KPIs) to implement and track and risks to be mitigated during the expansion of sales and supply chain operations.
2. a
This case study will exclude upstream battery and cell
component manufacturing and product quality
Battery and Cell Component
Upstream Supply Chain
Quality
3. Network design
1
• eMobility solutions are on the rise globally with consumers choosing more sustainable modes of transportation
• This has lead to an increase in battery powered motorbikes, scooters and cars
• Greatest challenge comes from being able to fulfil the customer orders for direct-to-consumer business model
• New market entry for companies are great opportunities to set the foundations of an optimized distribution network and a purpose fit
distribution warehousing and servicing partners that will deliver finished goods across a country
• Fast delivery options will require certain materials / finished goods to be kept with economical order units or safety stocks
(assumption: sea shipment is one month)
• Network design should happen hand in hand with sales and operations teams, forecasting the quantity and port of entry of goods
Distribution /
Assembly Centre
Port
Pick Up
Centre
Local
Pop Up
Delivery
Customer
Manufacturer
Demand /
Channel /
SKU
Distribution
1
Commonality
Analysis
2
Accurate
Lead Time
Info
5
Service
Capacity
(Whse /
Delivery)
4
Safety
Stock /
Reorder
Trigger
3
Evaluation
Single /
Multi
Sourcing
6
*Not an exhaustive list
Decision
4. To establish a fast delivery for customers, we need to optimize ordering of
certain parts of the scooter, create new SKUs, order longer lead time parts in
advance and hold and possibly custom-assemble final product in the country
Wheels / Frame
Body Color
Panels
Battery
Headlight
Network design
1
5. Evaluation
Decision
Demand / Channel
/ SKU Distribution
Safety Stock /
Reorder Trigger
Service Capacity
(Whse / Delivery)
Commonality
Analysis
Accurate Lead
Time Info
Single / Multi
Sourcing
1
2
3
4
5
6
• Determine which sales channels will be used and
create a timeline for rollout
• Forecast finished goods SKU per sales channels and
distribution
• Decide on service level and risk appetite
• Input an input all inventory holding costs
• Decide on lost sales loaded cost
• Returns – Inventory rate
• Select the right partner for warehouse and delivery
and hub operations
• Hub and Spoke model / Owner Partner (SA states)
• Rolling logistics of 2 week vs. 4+ weeks
• Smarter sourcing decisions based on Raw Material
/ Component commonality
• Optimized vendor management to ensure ideal
sourcing network
• Establish virtual control tower through digital
adoption for order management
• Constant KPI evaluation with suppliers
• Extra battery (i.e. factor of 1.2) and accessories
(helmets, etc) common purchase evaluation
• Information fed to S&OP and link to procurement
Top Evaluation and Decision Points
1
6. Catch the sales
demand
Fast repeat
orders for top
sellers
Maintain a
service level
with the right
risk appetite
Time on
offer
Forecast
Predictability
Manufacturing
Complexity
Sales
Pattern
A SKUS
B SKUS
C SKUS
Fulfilment and Supply Chain Strategy for SKUs
1
SC
Strategy
High
Medium
Low
7. Team & high-level process
1
Sales
Channels
Freight
DC
Planning &
Ordering
• Procurement Manager
• Planner
• DC manager - Outsourced
• Logistics specialist
(Import/Export included)
• Logistics specialist
• Inventory specialist
Sales
forecast
Inventory
and order
planning
Inventory
Accuracy
Distribution
planning
Delivery
Operations
• Customer delivery specialist
• Returns manager
8. Top 3 Risks and how to mitigate them
2
Mitigation
• Up to date lead-times entered in the system
• Monthly catch up with key suppliers
• Accurate safety stock calculation with updated
parameters
• Spot price vs. capacity buying dynamic financial
models
• Order grouping
• Continuous bottleneck analysis with the suppliers
• Weekly team catch up
• Work with recruitment agency / local knowledge
• Outsource to the local partner
• All certifications to be collected and validated
• Company level zero-tolerance activities are routinely
communicated
• Supplier code of conduct trained and signed by
suppliers
Top Risks
• SKU or
product
shortage
(i.e. chip)
• People
leaving /
finding talent
• Sustainability,
Labor
Standards,
ESG
Monitor
• Leadtime
• OTIF
• Availability
• Turnover %
• Revenue /
person
• SCR
• Cost per hire
• Onboarding
• ESG Audits
• References
• Production
Audits
9. Examples of risk mitigation tools
2
On going risk assessment
Project roll out (FMEA)
10. KPIS Needed for monitoring for the expansion into new markets
3
People
Empowered decision
makers
• HR recommended organizational metrics
• Absence
• Personal Development metrics
• Order entry issue tracker
• Warehouse process / labor hour (pick+pack, receiving, loading)
• Last mile delivery
• Total service labour time / delivery
Process
Lean iterative
processes that can be
standardized
• On Time Delivery for each SKU to Port
• On time production schedule vs. actual performance
• In full production / Delivery (Order Accuracy)
• Transportation costs
• Warehousing costs
• Number of urgent shipments (usually air)
Technology
Enabler for a smooth
operation
• Product set up times (Standardization needed) – Measured in time
series and improvement over historical
• Issue resolution (Issue per product setup)
