The Automotive supply chains continue to be stretched as the outsourcing trend is followed by a geographic expansion into low cost countries reducing part costs and inflating the logistics costs and risks.

With continued market pressure on prices and the recent announcement of the €5,000 car, we can expected even more focus from all the actors on driving cost out of the Supply Chain while trying to create a differentiation through enhanced distribution.

• "For a top brand like Mercedes-Benz, it is important for the whole supply chain to be world class...", says Piehler, "Since the new system launched, revenue from the sale of accessories has increased annually by 30 percent, while the cost of carrying inventory has decreased by half. Obsolescent inventory is down to one fourth the level it was in 2000. Vendor compliance, which stood at 19 percent in 2000, is now at 93 percent. Lastly, because of better back-order management and freight management, freight costs have been reduced by 25 percent."