Logistics supplier integration in the automotive industry

Abstract

PurposeIn recent decades the automotive industry has established a variety of new forms of logistics integration between automobile assemblers and their suppliers, in particular those in the first tier. The purpose of this paper is to outline which form of logistics integration original equipment manufacturer (OEM) assembly plants use to link up with proximate suppliers, and to classify and compare different types of logistics supplier integration.Design/methodology/approachThe data and insights for this paper come from a literature review of research and practitioner papers and studies to survey logistics integration models in theory and practice. In addition, data are collected through semi‐structured interviews and site visits.FindingsThe main findings are summarised in five conditions which characterise logistics supplier integration in the automotive industry. These conditions vary significantly between local dedicated supply as discussed in this paper and the traditional supply, which is distant and scattered around suppliers. These main conditions are “geographical proximity”, “delivery contents, volume and sequence”, “shared investment and asset specificity”, “information sharing and information technology system integration” as well as “transport system”. Although all of the five conditions were considered relevant for the description of existing integration forms, only the “geographical proximity” dimension is emerged as most suited for a formal typology. Therefore, a seven‐step integration model was developed which allows for a categorisation and comparison of existing logistics integration forms of proximate supply.Research limitations/implicationsThis research aims to support the academic study of cross‐company and inter‐organisational supplier integration by providing consistent criteria for cross‐site comparisons. A holistic and consistent understanding of different logistics integration types will be necessary, which will help in evaluating the actual integration forms such as supplier parks.Originality/valueThe majority of studies into the supplier integration phenomenon conclude that logistical concerns are the driving factor behind supplier co‐location. Therefore, the focus of this research is on the spectrum of vertical integration in logistics between the vehicle manufacturers and their suppliers.