The relationship with Valeo began through the efforts of JAS Brazil and now has spread throughout the Valeo world to countries like India, Mexico, the USA, Czech Republic and many more. JAS ability to provide local personal attention throughout so many global locations is what has allowed our growth with Valeo in China.
In fact, at the end of 2008, JAS China began its success story with Valeo, by handling all imports from Europe. Thanks to a dedicated team of 4 persons in JAS Shanghai and the support from the global account team around the world, JAS has managed to develop cooperation with one of the worldwide leaders in car equipment.
Back in 2008, Valeo did not fully control its supply chain, mainly because 38 forwarders were assigned for 126 Valeo sites. With such a large panel of suppliers, our customer had tremendous difficulties to globally coordinate and optimize their flows. They had therefore the need to review this panel of Logistics provider in order to reach Valeo’s 3 axes of priority: Quality of service, Cost, and Lead Time.
The challenge with the first axe at that time was to get Valeo’s voice heard amongst these 38 suppliers, and insure that they would comply with their quality requirements. The second axe was far to be fulfilled, as Valeo recorded a container filling ratio at 35 % only and a very limited bargain power. Finally, the last axe couldn’t be optimized as well, which represented a very high risk for their supply chain, based on J.I.T.
Briefly, our client lost plenty of opportunities, since there was no global logistics contract to define the scope services and responsibilities expected from the logistics suppliers. Valeo plants were directly dealing with the Freight Forwarders, good point was customer/supplier intimacy, but very risky in case of economic crisis (such like in 2007) when Valeo couldn’t control their global supply and had to use airfreight instead of ocean freight.
How Valeo could overcome these challenges and how JAS did help?
Led by the Valeo Supply Chain Director and his team of coordinators for the Valeo Group, a BOL (Bid On Line) was launched in 2008 in order to stream down the number of suppliers, simplify the communication flow and address the key issues to only few qualified suppliers. JAS was proudly assigned as qualified supplier in 2008.
After 2 years, JAS China is working with 12 divisions, out of 15, and reaching a quarterly turnover of over RMB 10 Mio in 2010, against RMB 3 Mio in Q1 2009. This tremendous increase has been possible thanks to JAS global accounts structure and our omnipresence on each site in China, giving Valeo the feeling of quick action and great flexibility. Moreover, JAS has managed to increase the overall filling ratio by 10%.
JAS had actually the opportunity to demonstrate its strength, through 2 major events that dramatically shuffled the logistics world: the 26 % cut in supply by shipping operators in 2009 as direct consequence of the recession, and the 2010 Iceland volcano ashes crisis when most of European airports were closed. In both occasions, JAS managed to adapt itself to the situation.
The first obstacle had been cleared thanks to our Worldwide Ocean Team, who had successfully secured the necessary space and equipment for our Global Account.
The second one had been solved through the set up of a hub in Turkey, where all air freight shipments had been consolidated and successfully shipped to their final destinations.
Obviously, it is not an easy task to ensure the supply chain of an automotive customer, and JAS China had to face a dozen of claims this year, but these bad stories turns into good ones, and it gives us the chance to continuously improve ourselves; we are turning the difficulties into opportunities.
Saved the day, by saving days!
Improvement of the supply chain is also the key factor to reach the satisfactory level with Valeo. For example, by analyzing the routes and saving days through a selection of alternative ports of discharge, we recently managed to save 5 days lead time for VCC Shashi by shipping containers to Wuhan port instead of Shashi port. JAS literally saved the day, by saving days!
We can add the following statement from the Valeo Branch - VPS & Supply chain Director: “JAS’ ability to quickly respond to our biggest challenges, prices and lead times has been appreciated throughout Valeo’s group. The global team led by Scott Smiley and Franck Portet in Asia has contributed to this success. Thank you and keep help us optimizing our flows.”
“Win/Win/Win” deal
The best story is a “Win/Win/Win” deal we managed to reach with Valeo’s suppliers in China, which were shipping to the same consignee in Czech Republic. JAS successfully negotiated with two suppliers to share the FCL shipment of the first one, in order to create our first FCC product from China to Czech Republic. The direct advantages are numerous for all parties involved. The suppliers enjoy a consolidated rate; Valeo receive the goods in the same optimized container with a container filling rate of 75%, via Maersk services; and, the lead time is optimized as well (AE2 fm Shanghai to Bremenhaven 23 days + 7 days rail/route to destination = 30 days). Thus, JAS has managed to fulfill its duty: design better, cheaper and faster solutions for Valeo.
Ready for more
This is the big picture that needed to be assessed in order to design and coordinate a productive strategy for our global account, and help Valeo adjust their supply chain in China, with their divisions and suppliers. We have now taken advantage of this situation to acquire the necessary knowledge through an experienced team, which would analyze your flows and propose the best ways of optimization.
More importantly, JAS has gained a tremendous experience in dealing with such an organization as Valeo, which requires a global structure enabling a global coordination. With this great asset into JAS’ scope of service, we are prone and eager to replicate this model to your most challenging supply chain requirements.
What’s next?
New opportunities of development with Valeo are possible due to its recent restructuration by region. It also means that we are permanently looking forward to improving our lean supply chain, and providing a larger scope of services to our clients, such as logistics engineering, total costs analysis, etc.