Page 24 - Case Study Annual 2015

LAA 2015 Platinum

Volkswagen South Africa / InSync Solutions

Lean logistics gives VW Uitenhage
the leading edge

As part of the Volkswagen Group’s global strategy, Volkswagen SA consolidated
the production platforms at its Uitenhage factory from four to two to prepare for
the production of the latest Polo range for all right-hand drive countries. This meant
the plant had to produce vehicles at double the best output rate it had previously
achieved and in turn raised some formidable challenges for the supply chain.

In the mid-2000s a number of global strategic trends to increase production between 2008 and 2010 to
emerged to influence the automotive manufacturing 140 000 units per annum. This included the assignment
arena. For the Volkswagen Group, one of the world’s of all New Polo production to VWSA for all right-hand
largest automotive manufacturing companies, a drive countries to start in 2009.
move towards global ‘networks’ of plants emerged,
characterised by a target of higher volumes per plant As a global supplier, VWSA would be required to
(up to 200 000 units per annum) serving a wider range produce a much wider range of model options. A highly
of markets. productive, flexible plant was required to ensure the
successful integration of the South African plant into the
This could be achieved by having fewer platforms global vehicle supply network of the VW group.
per plant, with multiple vehicles off each platform
(known as ‘shared platforms’). This brought with it more A key aspect of this approach was a programme
options to customers while producing higher volumes that recognised the importance of effective logistics to
from a single platform with shared components. meet the new requirements. This led to the introduction
of VW’s New Logistics Concepts (NLC) as a global
Of particular significance to South Africa was direction for logistics – to be implemented in SA for the
a growing desire to move production locations to New Polo, and then for the rest of the world.
emerging economies.
Global business for VWSA
VW global direction 2006-2010
The reduction of platforms would normally cause
In benchmarking its own operations against competitors a reduction in output volumes, but in the case of
it became clear that there was a drastic need for the new Polo range, Volkswagen SA (VWSA) had
improvement. In 2010 the VW Group announced it was successfully secured export contracts that resulted in a
aiming to be Global No1 in sales volume by 2018. And, sharp increase in required output volumes. This increase
significantly, VWSA was identified as key in achieving in scale brought about many advantages for VWSA and
this goal. This meant investing R4-billion on SA facilities its supplier base.

22 the logistics news case study annual 2015