Preliminary research indicates that the underlying conclusion
emanating from the report will support Britain's long-term future as a
centre for automotive manufacturing excellence bolstered by the
unparalleled quality and sophistication of its logistics operations.
January 2001 - Further to the Logistics Committee’s presentation to the Executive Counsel at this years’ AGM, on
its research findings since its inception in 1997, it has been decided to publish a special research report,
summarising the research department’s findings from its work over the three years. The report entitled “British
Automotive Manufacturing – A New Perspective”, to be published in the Spring of 2001, will also include case
studies on those companies who have been accredited with the Institute’s Award of Excellence for outstanding
contribution to the development of “best practice” in the sector as determined through research conducted as part
of our three year programme.
Targeted at Chief Executives in automotive manufacturing, OEM’s and the automotive logistics industry worldwide,
as well as the Institute’s membership, the report will leave the international community in no doubt that Britain
has what it takes to sustain its status as a major player in global automotive manufacturing.
British Automotive Manufacturing – The Background:
At our AGM in October 1997, the Institute of Transport Management defined logistics and the trade of the
logistician (see appendix 2). These definitions are a result of collaboration between the I.T.M. and the Institute for
the Management of Logistics (IML) in Geneva, and senior transport directors and logisticians in the UK and Europe
and signalled the Institute's intention to include the development of the logistics market as part of its education,
information and accreditation programme.
The Institute announced the setting up of a task force, the Logistics Committee, to begin a three-year programme
of research and benchmarking with a view to the integration of logistics principles into the fabric of the UK and
the European transport sector. It was further decided that by virtue of the automotive industry’s high demands
upon its logistics providers, and its significant reliance on supply chain strategy to gain competitive advantage, that
logistics practices in this sector would be used as the benchmark for all research.
The automotive industry’s high demands reflects the manufacturers desire to move exclusively towards production,
design, sales and marketing, looking to the logistics market to provide more and more added value services. The
most demanding of which is “moduling services” ie. the assembly of dashboards, radiators and tyres etc, off line
before delivery to a pre ordered schedule. This development, together with the 3PL’s existing roles, will see the
logistics partner move more and more into the production process.
As part of the three year programme it was further decided to accredit those companies, which the research
concluded, were making the most outstanding contribution to the development of best practice in the British
automotive manufacturing sector with the Institute’s Award of Excellence. The central aim of this accreditation
programme is to provide additional confidence to the World’s automotive manufacturing sector as well as providing
a benchmark for others in the sector to measure their performance against.
The methodology employed in both our research and accreditation programme was to firstly establish which
manufacturing plant in Britain was the most efficient and making the greatest contribution to the development of
supply chain standards in the automotive sector in each of the three years of the programme. That company
would then be deemed “UK Automotive Manufacturing Company of the Year” and receive the Award of Excellence.
The Institute’s Award of Excellence recognises and rewards organisations in Britain that demonstrate excellence in
supply chain management, which in turn help to enhance the understanding of supply chain excellence within
British industry and to help individual organisations to identify their strengths and weaknesses.
Please see Appendix 1 for a full list of all those companies drawn from every part of the automotive
manufacturing industry, who have been accredited with the Institute’s Award of Excellence as part of the
British Automotive Manufacturing – an overview.
British Automotive Manufacturing will provide an in-depth analysis of how automotive manufacturers in Britain
organise their logistics operations by looking at every element of the supply chain. The report will focus specifically
on the relationships between manufacturer’s and their suppliers and other partners, from initial inward sourcing of
components to distribution.
This comprehensive report will utilise both quantitative and qualitative analysis to delineate the key trends shaping
the automotive manufacturing industry in Britain. The report, which draws primarily on findings from the
Institute’s three-year research programme will also include intelligence drawn from interviews, published statistical
data, service guides, annual reports, surveys and other resources. The report will be complimented by
contributions from leading figureheads in British automotive manufacturing, OEM and automotive distribution
The publication will in essence provide a clear and concise overview of the state of the automotive manufacturing
market in Britain.
Preliminary findings indicate that one of the underlying conclusions emanating from the report will support
Britain's long-term future as a centre for automotive manufacturing excellence bolstered by the unparalleled quality
and sophistication of its logistics operations.
The objective of the report is to reinforce the status of Britain as a centre of automotive manufacturing excellence
on the international stage and to establish the very tangible links between the increased productivity at British
Automotive manufacturing plants and the quality of the sectors logistics solutions.
Preliminary findings/Topics to be discussed:
The strategic emphasis to date within the automotive manufacturing sector, has been on logistics upstream,
with manufacturers regulating relations with providers and conveyors to the point where assembly plants
typically hold only one third of one production days worth of component stock. This has been achieved
through the application of the “just in time” philosophy to delivery and has seen the advent of supplier
villages operated by 3PL’s close to the manufacturing plants, which, using cross docking guarantees a regular
supply of the right components at the right time, to the trackside.
In the case of logistics downstream, or the regulation and interpretation of customer service requirements or
the distribution part of the supply chain, similar efficiencies are not being achieved. In fact in most cases
finished vehicle stocks are held for an average of 50 days in Europe. This inefficiency provides the most
potential for cost savings and increased sales. Market research has confirmed that only 12% of cars ordered
which are delivered later than two weeks of order are actually bought by the original customer. The
International Car Distribution Program (ICDP) estimate that if lean distribution is adapted by European
Automotive Manufacturers, vehicle stocks will be reduced in value from £18 billion to £8 billion. However, the
process of moving to lean distribution is constantly being interrupted by the continuation of mergers between
the major global players, which in turn is leading to the rationalisation of high street dealerships.
Strategies like e-commerce will open up a wide variety of options for manufacturers to change their
distribution patterns, but ultimately, successful distribution strategies will have to concentrate on reducing
order to delivery times substantially if the industry is to capitalise on these developments.
This achievement of international recognition can be traced back to the Industry Forum instigated by the
SMMT and the DTI. The process, instigated by the unique collaboration between the Department of Trade and
Industry, the SMMT and leading vehicle manufacturers and suppliers to improve quality, reduces cost and
improves delivery times can be directly attributed to improvements in the efficiency of the supply chain.
Case Studies drawn from benchmarking and accreditation process:
British automotive manufacturing will include case studies drawn from the ranks of the three Roll of Honour’s
announced as part of the programme. It is envisaged that these case studies will provide companies operating at
any point in the supply chain with a benchmark with which to compare their performance.
Accreditation – Roll of Honour 1997-2000
This definitive benchmarking was instigated in 1998 when the Institute’s newly formed Logistics Committee
examined the way car manufacturers in Britain organised their supply chains. In this first year in which the
logistics chain in various automotive plants were scrutinised with a view to accreditation, Rover was honoured with
the “UK Automotive Manufacturing Company of the Year 1998/99” accreditation, in recognition of Rovers’
commitment to supplier excellence with its own awards scheme, which honoured those companies which had been
able to respond to the company’s demanding standards in a competitive global environment.
The Logistics Committee presented the Institute's awards committee with its nominations for components supplier
Award of Excellence accreditation for companies who had won through in the Rover Supplier Excellence scheme.
In 1999, Nissan Motor Manufacturing Ltd UK was honoured with “UK Automotive Manufacturing Company of the
Year 1999/00”. The company was deemed to be an exemplary exponent of an excellent logistics operation
achieved through a synergic relationship between the manufacturer and its chain of suppliers.
Also in 1999, the Logistics Committee presented the Institute's awards committee with its nominations for
automotive logistics Award of Excellence accreditation for companies which had come to their attention as part of
the research programme. Each company represented a different part of the supply and distribution chain.
The preliminary nominations for one of the most prestigious titles within the automotive manufacturing sector, the
title of “UK Automotive Manufacturing Company of the Year 2000/2001”, have been announced. The nominees are:
Honda of UK Manufacturing Limited
One of the centrepieces of the report will be a profile of the eventual recipient of the “UK Automotive
Manufacturing Company of the Year 2000/2001”, which will be announced this autumn, and will detail how its
manufacturing process in Britain is organised.
Appendix 1 - Roll of Honour
The following companies drawn from the British automotive manufacturing and Tier one and Tier two OEM
component sectors as well as allied suppliers, distributors and ports, have been singled out by the Institute for
their outstanding contribution to the improvements of standards of logistics excellence in the automotive sector.
Rover – “Automotive Manufacturing Company of the Year 1998/99”
Nissan - “Automotive Manufacturing Company of the Year 1999/00”
Nominees for “Automotive Manufacturing Company of the Year 2000/2001”
Honda of UK Manufacturing Limited
Lucas Diesel Systems:
“UK Original Equipment Supplier of the Year 1999”
Inbound - Ryder Integrated Logistics:
“European Automotive Logistics Company of the Year” (JIT)
Outbound Distribution - Axial UK & Europe:
“European Automotive Logistics Company of the Year” (Distribution)
Shipping - Ugland International Holdings Plc:
“Seaborne Vehicle Transportation Company of the Year”
Outbound Distribution - Hammond Logistics:
“Automotive Parts Logistics Company of the Year”
Pioneer - Autobytel:
“Award of Excellence - Pioneers in automotive e-commerce”
Ryder Integrated Logistics was also recognised by the Institute for its work in developing logistics solutions for
Nissan in Sunderland. The Institute awarded Ryder Integrated Logistics the accolade of “Automotive Logistics
Company of the Year 1999”. Ryder Integrated Logistics collects components from Nissan’s 120 UK suppliers, which
are then cross-docked at its Alfreton distribution hub for supply to specific receiving locations at exact times to
Nissan’s Sunderland plant.
For further information please contact:
Patrick Sheedy, Media & PR Director
Institute of Transport Management
Unit 64, 14-20 George Street,
Birmingham, B12 9RG
Tel: 0121 440 5222 Fax: 0121 440 3425
Notes to Editors:
THE INSTITUTE OF TRANSPORT MANAGEMENT
Who could have foreseen in 1977 when George Hughes of Coca Cola and William Gavin of the RAF established the
Institute of Transport Management that it would, by its coming of age in 2005, have grown to become the leading
provider of accreditation to the worldwide transport industry.
The Institute of Transport Management was formed so that transport managers like George Hughes and William
Gavin could share vital market knowledge with each other. George Hughes was at that time the transport director
at the newly built Coca Cola manufacturing plant in the UK, set up to meet a growing demand for the product in
Europe (In fact Coca Cola UK is the original of the American multi national species which came to Europe in the
seventies after the UK joined the then European Economic Community as a full trading partner) while William
Gavin as Crew Chief Transport Commander at the RAF led the airforces crew command division's transport
It was a chance meeting between both at a trade show in Birmingham in the mid seventies, that was to be the
beginning of the Institute. It was at that meeting that both realised that each had a solution that the other was
seeking to a route planning challenge that each was facing in getting product/supplies into south east Europe.
George Hughes had been a member of a similar Institute of Transport Manager's in the US, which he had found
invaluable. He lamented its non-existence in Britain. Both men agreed to try and replicate a similar institute in
the UK with the express aim of providing further education and information to transport managers as its raison
The Institute would work as a forum for the exchange of ideas and solutions in the building of what were then
the equivalents of today's supply chains. The idea for the Institute was based on the precept that transport
managers in membership would share what they knew about transport and distribution with their fellow members.
A steering group was formed and transport managers right throughout the UK from all areas of industry and
commerce were invited through their respective 'alma maters' to join the Institute and share in its work. As a
condition of membership, members were asked to provide the Institute (in strictest confidence) details on transport
policy successfully utilised in planning transport solutions in their respective corporations. This application has from
its inception placed particular emphasis on details concerning supply partners. This information under the
administration of the Institute's executive committee was originally made available to members on foot of written
or telephone requests to the Institute.
One year after the Institute's inaugural meeting on October 13th 1977, which was subject to extensive television
coverage by ITN and the BBC and with a membership of 2,000 transport managers, the Institute found itself
handling up to 40 requests a week from members for market data .We were wasting too much time and money
meeting our members needs on a one by one basis, the Institute had to find a new formula for the dissemination
of its collective information.
Fortuitously `Transport Journal `established in 1942 as an independent magazine for the transport professional
had become an uneasy bedfellow amongst a range of scientific publications published by its then owners and was
offered for sale in that year. Transport Journal had by 1978 grown to a controlled circulation of some 12,000 and
boasted a readership of some 50,000. It was cited in the Institute's first research survey of its members as the
choice by 75% of our membership, as their core source of news and information on the transport industry. The
synergy was irresistible and the Institute bought the title, adopting it as its official organ and re-writing its
constitution, so that the Journal's core focus and "raison d'etre' would be to report the results from the Institute's
various research programmes undertaken in the pursuit of accreditation and to bring its vast readership into
membership to help guarantee the quality of each recommendation or accreditee.
In its first year, the Institute had learned that generally the nature of member's requests were very similar i.e.
"Who provided a land, sea or air transport service to a named market and what provider or providers were the
majority choice of Institute members?”
It also learned that it could through some very simple number crunching, searching its database in a general way,
establish the most popular choices made by members. This new understanding of information and its use is the
cornerstone of the Institute's accreditation programme
In anticipation of members’ demand for information on an ongoing basis the Institute created its Awards of
Excellence programme, whereby those supply partners who were the most popular choices made by members,
would be honoured.
This process is supported by an independent assessment on the market leader in each discipline, and an
operational overview produced which is used to support the company's case for accreditation. Companies and
organisations successful through this process are allowed to create a publicity programme around the accreditation
and wear the Institute's insignia on its corporate sleeve.
The impact of the Institute's accreditation programme operated over the last 21 years is summed up in the
award's committee's statement issued at the time of our 21st birthday in 1998 in which it said:
"The awards committee reports that there has been a gratifying rise in standards amongst members since we
began our work in 1978. We are of the opinion that the competition for accreditation created by the awards has
had beneficial effects right across the industry spectrum. Over the last 21 years British and International
recipients have served as a benchmark to companies aspiring to success in their respective segments.”
Recipients of the ITM's awards down through the years include some of the world's leading port authorities,
airlines, shipping lines, vehicle manufacturers, freight forwarders and many more.
Today the ITM represents some 10,000 transport managers and logisticians right through the UK and Europe and
continues to pool the knowledge of its members annually and to answer questions on the best and most efficient
ways of improving its members supply chain and distribution needs
THE LOGISTICS COMMITTEE
Since the Institute of Transport Management's inception in 1977, much has changed in the transport industry and
most of that change is encapsulated in one word - Logistics. No longer does the transport manager only delegate
the movement of his goods from a to b, or the collection of goods from b to a, he is now looking for a complete
solution, a more sophisticated solution and indeed a solution which for all intensive purposes appears to be
provided by and controlled by him and his company.
At our AGM in October 1997, we defined logistics and the trade of the logistician. These definitions are a result of
collaboration between the I.T.M. and the Institute for the Management of Logistics
(IML) in Geneva, and senior transport directors and logisticians in the UK and Europe and signalled the Institute's
intention to include the development of the logistics market as part of its education and information programme.
The Institute announced the setting up of a task force known as the Logistics Committee, within the Institute, to
begin a three year programme of research and benchmarking with a view to the integration of logistics principles
into the fabric of the UK and the European transport sector.
Logistics is one of the key elements of a company's strategy, and has developed as a result of the substantial
changes to the world's economic and commercial environment. These changes are:
1. Globalisation of markets and internationalisation of trade.
2. Removal of tariff barriers and the creation of large continental markets.
3. Technological developments involving telecommunications and control.
4. Development of electronic trade.
5. De-regulation and privatisation of transport services.
6. Reduction in mobility costs.
These factors have contributed substantially to a change in the rules of market operation and have brought
logistics to the position of being the defining economic force underlining all operations associated with the
movement of goods on both a local and international scale The authentic logistics provider assured single-entity
control through every stage of the operation, door to door.
Logistics is defined as a process involving a clearly defined strategy combining the application of the following
practical and theoretical disciplines in tandem towards the completion of a continuous distribution cycle:
Practical: Organisation, marketing, production management, human resources management, accounting and finance,
information and communication systems, distribution, and supply chain management, transportation.
Theoretical: Forecasting, modelling, decision support, similation, analytical accounting and controlling, applied
statistics to logistics management, systems approach, architecture of information systems and total quality
The trade of the logistician is defined as:
“The logistician establishes links between all sectors (purchase, production, distribution, r &d, sales) of the
company. He is like a project manager and works in a transverse way, his goal is to decompartmentalise the
company functions. He sets up the organisation method in order to optimise flows of matter and information.
"On the level of logistics upstream, he regulates the relations with providers and the conveyors and as regards
logistics downstream his role is to perceive the customer service requirements and to follow this through in terms
of reliability speed and effectiveness
The logistics committee has since its inception presented the Institute's awards committee with its nominations for
various logistics awards as part of its work. The ITM awards committee oversees an annual series of awards, which
are presented to those suppliers of products or services that have made outstanding contributions in the transport
industry. Recipients of the ITM's awards down through the years include some of the world's leading port
authorities, airlines, shipping lines, vehicle manufacturers, freight forwarders and many more.
The premier award presented under the auspices of the logistics committee, that of "Global Logistics Company of
the year" was won by Bax Global in our inaugural research piece in 1998 followed by MSAS Global Logistics in
1999 and now UPS Worldwide Logistics for 2000.