Honda Australia had established a Melbourne based, national distribution centre in the late 1970’s. This was fundamental to the Australian parts and accessories distribution network and since then, Honda had not undertaken a strategic review and analysis of the supply chain. Parts and accessories for the local dealer and national customers were no longer being fully sourced from Japan, but are now being procured from around the world.
The national distribution centre in Melbourne receives imported stocks by sea container and air freight. Orders are fulfilled to the national customer base consisting of the dealer network and repairers from this facility. It was time to review the current strategy in relation to service levels, logistics costs and comparison to other major automotive parts and accessories suppliers.
Henderson Logistics with their strong retail automotive experience and independent expertise in supply chain management, provided Honda with the confidence to investigate the current inbound supply chain plus national distribution of parts and accessories. This then led to development of the most viable options for improvement.
Various supply chain options were modelled, taking into account:
- international shipping and discharge points
- warehouse options – centralised vs. decentralised, facility size and function
- stock grouping locations
- national distribution costs
- service levels
- impact on CO2 emissions
The current network costs, service levels and CO2 emissions were compared within each option. Detailed analysis conducted, highlighted a number of financial opportunities in current sales and distribution processes that were implemented immediately as the study progressed.
The strategic review and analysis of Honda’s supply chain established key principles and directions for a lean and flexible, parts and accessories business unit.