Finished vehicle logistics (FVL) has a unique role within an automobile manufacturer's wholly-owned sales and marketing company. This role is seldom fully understood or properly appreciated by either the organization's manufacturing or sales/marketing department. FVL is often an orphan, devoid of a champion within either organization. The person responsible for FVL inside the marketing/sales company is not for corporate peacocks or those who shy away from a challenge.
This is the unique position MBUSA, LLC (MBUSA) finished vehicle supply occupies in the Mercedes-Benz AG (MBAG) family. In simple terms, MBAG has a manufacturing component and a sales/marketing component. MBUSA is the exclusive sales and marketing entity for MBAG in the United States.
MBUSA reports to the marketing/sales organization in MBAG, which is responsible for the worldwide sales/marketing of Mercedes-Benz vehicles, including sport utility vehicles (SUVs).
The plants that manufacture Mercedes-Benz vehicles worldwide report to the manufacturing organization within MBAG.
Manufacturing and sales/marketing are two corporate customers housed within separate silos, each having different key performance indicators (KPIs). The sales/marketing organization has employees focused on supporting sales with creative programs, marketing, customer experience, etc. On the other hand, the manufacturing customer focuses on the efficiencies in building cars from both a cost and quality perspective to ensure the vehicle can meet and maintain the customer experience. FVL serves both of these corporate customers and must find the line to manage and balance expectations while directly reporting to the sales/marketing customer.
Manufacturing is focused on consistency and long-term planning. They are not structured and do not have the flexibility to respond to the quick and varied changes in the market
One of the primary causes of friction between the two FVL customers is time. The sales/marketing and manufacturing organizations operate on two completely different time horizons. The FVL department is challenged to make both customers happy, and it is not easy. For example, the FVL supply chain starts four to six months before a finished vehicle is available to the retail market. This extended time frame does not address the changes that occur in the markets over a month or, in some cases, in weeks and days relative to sales demand.
Manufacturing is focused on consistency and long-term planning. They are not structured and do not have the flexibility to respond to the quick and varied changes in the market. This requires that the FVL team develop processes that provide flexibility to the sales/marketing customer to address changes in the market with minimal advance notice. However, these processes are still constrained by the long lead time required by the manufacturing customer. Changes that the FVL team incorporates are rarely recognized within the current manufacturing cycle due to the complexity of the FVL supply chain. As such, the sales/marketing customer often views these changes as unsuccessful. Thus, any FVL team within a sales and marketing company has the challenge of anticipating potential changes and addressing them within their very limited sphere of control. For example, holding finished vehicle inventory to address potential high-day supply of vehicles at dealers.
The ability to teach/instruct the manufacturing and the sales/marketing executives is a critical skill set for the FVL department lead in organizations set up with two objectives (manufacturing and sales/marketing). The differences in the time frames involved are not natural to the executive’s experience in either silo. However, understanding the challenges faced by both the manufacturing and sales/marketing sides of the process is necessary for the organization's success. It requires the FVL team to be able to embrace and understand both sides of the business and provide the necessary interface so that both silo's objectives are met for the entire enterprise. This teaching process is both critical to the executive’s education and time-consuming. The weaker and less experienced the executive, the more challenging the teaching process. FVL is a complex but rewarding role in such an organizational setup that requires individuals to be both strategic and operational for success. At times, neither silo recognizes nor understands the challenges which occur each day to be successful in FVL.
