Storage options for the automotive industry

The automobile industry is one of the most important in the world. In Brazil it is no different. According to the 2022 Yearbook of ANFAVEA, the National Association of Motor Vehicle Manufacturers, the segment brings together 27 manufacturers of vehicles, agricultural and road machinery, including 486 companies associated with Sindipeças. There are also 4,897 vehicle dealerships affiliated to Fenabrave.

According to the website automotivebusiness.com.br, “the sector comprises 57 industrial units in nine states and 39 municipalities, which provide an installed capacity for the production of 4.5 million vehicles. Cumulative revenue in 2020 was $39.6 billion.” More than one million and one hundred thousand people work directly or indirectly in the segment, responsible for 20% of Brazil’s industrial GDP.

The numbers are impressive. But the profit margin is not always so expressive, taking into account the investments that corporations must make in their industrial plants. Recently, for example, Ford changed its global strategy, ceasing to produce popular vehicles, which led to the closing of Brazilian factories. That’s why process optimization is so important. Of course, this is also true for industry storage units.

The automotive sector works with different types of materials, which require slightly customized storage strategies, depending on the SKU. Here are some of them, according to the blog solistica.com:

1. MECHANICAL PARTS – Gearboxes, gearboxes and engines must be handled with special care and cannot be moved from one side to the other, as they have oil inside and, if this is spilled, the part can be damaged.
2. WEAR PARTS – We are talking about products such as brake pads, which should always be left in their original factory packaging (inside the package). When necessary, the part is removed using protection, such as masks, as the material is toxic.
3. ELECTRICAL PARTS – As in the case of lamps, they must not be manipulated by the head.
4. BATTERIES – These are hazardous materials and color classifications and expiration dates should be used in your case. They should never be stored on the floor. Always on shelves.
5. LIQUIDS – With chemical products, such as adhesives, cleaners, coolers or additives, the expiration date must be checked before storage, because if they have expired, such goods should not be distributed.

Also according to the blog solistica.com, storage for the automotive sector requires a series of different shelves, due to the wide range of components:

• “Shelving for large loads or special products. They are used when the dimensions or weight of the load require (pipes of more than 1.5 m in length, tires, etc.)
• Conventional bookshelf. It is the most used, it is used for the storage of palletizable goods.
• Compact shelves. Recommended when you need to store a large amount of the same reference for a medium-long period of time.
• Shelving for light loads and mini load. Used when the small weight of the packages to be stored allows.
• Standalone silo. It is the largest possible investment in a warehouse, both in terms of racking and maintenance equipment. In essence, these are high-height racks with aisles, each of which is serviced by a forklift.
• Mobile shelving: they move on rails in such a way that the access aisle is unique throughout the block. They are used when the volume of the warehouse is the main constraint”.

For professor Balduir Carletto, who teaches logistics at the Universidade Estadual de Ponta Grossa and at Faculdade Santana (both located in the city of Ponta Grossa, Paraná), today the automotive sector generally uses large warehouses with fixed shelves, refers to the physical storage structure. The difference lies in the technology used and the way of working. None of these companies operate without a robust WMS (Warehouse Management System) to control the stock and all the movement of goods. According to Carletto, “the automotive sector has been concerned over the last 50 years to rationalize all its processes, always operating through the JUST IN TIME method. Within this line of conduct, today, for example, the employee who is on the assembly line no longer leaves his job to be supplied with the materials he uses. Inventory assistants do this job to save the first group’s time. In fact, inventories are getting smaller and smaller. The company buys only what will be needed. It is part of the JUST IN TIME policy” (In time: Just In Time is a method developed by Taiichi Ono in Japan, in 1947, within the Toyota company. It is a systematic responsible for seeking the precision of the production chain, fitting operations and executions according to the level of demand (that is, everything takes place in due time, neither before nor after).

Another Japanese technique widely used in Intralogistics in the automotive sector is 5S. It consists of five steps that require the famous oriental discipline:

• Seri or classification: resides in the elimination of all damaged parts or disposal to maintain an orderly inventory that facilitates the identification of the parts.
• Seiton or order: it’s about finding better processes for organization and storage that allow optimizing times.
• Seiso or cleaning: consists of keeping the products clean and in good condition to avoid losses and accidents.
• Seiketsu or standardization: it is based on training employees in the norms that must be followed so that the operational methods are carried out in the best and only way.
• Shitsuke or discipline: this is about applying the four previous steps until a positive change is achieved in the company. (blog.solistica.com)

Professor Balduir Carletto also says that the automotive sector has used the Milk Run and Cross Docking methodologies a lot. The Milk Route, or Milk Run, in English, is a technique inspired by the way of working in the dairy sector. It is a scripted system in which goods are dropped off at one point and, at the same time, collected at another. Very useful method in a segment with so many components. Cross Docking, which in a free translation means “crossing the docks”, is a distribution system in which the goods purchased by the customer are received at the warehouse but are not stored, being dispatched as soon as possible to the buyer. In the automotive sector, this technique is used to reduce inventories. The difference is that the customer in question is the company itself, which directs the goods directly to the assembly line.

Another interesting feature in this segment is the volume of documents generated between the different storage units of companies in the production chain. According to the website dclogisticsbrasil.com “the process of automotive logistics requires documents and notes that must accompany the goods from the delivery by the supplier to the arrival at the end consumer. So, to avoid logistical problems, the main documents needed are:

• Electronic Invoice (NF-e);
• Auxiliary Invoice Document (DANFE);
• Electronic Bill of Lading (CT-e);
• Auxiliary Document of Electronic Bill of Lading (DACTE);
• Electronic Manifest of Tax Documents (MDF-e);
• Auxiliary Document of Electronic Manifest of Tax Documents (DAMDFE);
• Vehicle Registration and Licensing Certificate (CRLV);
• Civil Liability of the Road Cargo Carrier (RCTR-C)”.

That is why it is important to reinforce the need for good management software. RFID tags and barcodes can be very interesting alternatives so that nobody gets lost in the tangle of different components.

But if, for simplicity’s sake, you are part of this segment and want to simplify things, you can hire a logistics operator or even outsource the entire Intralogistics operation. But for that, pay attention to some details and choose a partner that meets the following requirements:

• Agility and full-time efficiency in operations;
• Proximity to the customer;
• Strategic location;
• Excellence in inventory management;
• Traceability;
• Safety;
• Risk management;
• Accurate and controlled information.

Whatever your decision, Águia Sistemas S/A is here to help you. We are the best in the country in Intralogistics. Keep in touch with us.