General Motors South Africa (GMSA) on Thursday provided an update on its programme for a streamlining of its parts distribution operations, in a move that demonstrates the company’s commitment to growing its business in South Africa and building relationships with suppliers and customers.

The company’s four parts warehouses will be consolidated into a single, larger warehouse operation located in the Coega Industrial Development Zone (IDZ) in Port Elizabeth. The entire operation will significantly reduce turnaround and lead times for parts so that both wholesaler and vehicles owners would have a world-class service experience. To this end, GMSA has also undertaken to provide vehicle owners with a rental car should the availability of replacement part delay the return of the vehicle.

GMSA operations manager Neil Langner said the 38 000-square-metre warehouse, which is larger than the current warehouses combined, required a total investment of R250-million.

Extensive planning

GMSA project manager for the new Parts Distribution Centre operation, Jose "Pepe" Espinosa, said the decision to build the operation, which lies just a few hundred metres from the Ngqura Port in the IDZ, came after extensive research and planning. Espinosa, an expert in the concept lean warehousing, said this was because GMSA had to ensure that the operation would be logistically sound and cost-effective.

Langner said that the port was a world-class facility and it would greatly reduce incoming and outgoing freight costs, as well as costs associated with container transport and storage. He said the distribution centre would be the core centre to handle parts for GMSA’s six brands, which make up 212 model derivates.

The centre also stores a supply of parts for each model over a minimum of a ten-year period, making it responsible for keeping 580 000 vehicles in South Africa on the go.

Lean warehousing

When asked by iafrica if the warehouse would contain a robot-controlled storage and picking system, Espinosa said there would be as little automation as possible in the centre. "Warehouse robots and similar machinery are very expensive to maintain – and they don’t work when the power is off," he said. Lean warehouse principles called for simple solutions and standard operating procedures, meaning that the parts distribution centre would run extremely effectively and at a viable cost, he said.

"If you go to the centre in Mexico, you will see that it looks and operates exactly the same as the warehouse here," Espinosa said, stressing that global standard operating procedures were the key to ensuring that GM’s operations worked smoothly.

The system also means that the 120 employees currently working in the company’s four warehouses will be transferred to the new centre as it becomes operational. Langner said the employees would be trained in the new operating procedures, which are aimed at increasing the number of parts picked per shift and ensure that the most frequently ordered parts are located at the front of the warehouse for the shortest lead times.

New house, new habits

"When you move into a new house, you need to learn new habits," he said in reference to the complete change in warehousing operation. "It’s no use building a new facility and then running it in the same way as your ’old house’," he said, pointing out it was proven that gains in productivity and innovation were short-lived in such projects if operating procedures were not revamped and revised.

Espinosa said the centre, which will handle over 191 000 part numbers with a value of R291-million when it is fully operational, would operate concurrently with the four other warehouses and take over from them systematically as their stock became depleted.

Construction of the Parts Distribution Centre began in August 2009 and will be completed by 1 May 2010. The first shipment to dealers from the new centre will begin in July and the warehouse will be fully operational by October.