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Warehouses on wheels: smooth logistics for Valmet Automotive

On-site visit to Uusikaupunki: Kalle Nuutila (in the blue and red jacket) leads Mihael Hagström from DB Schenker through the Valmet Automotive plant in southwest Finland, where the contract manufacturer produces, among others, the Mercedes-Benz GLC SUV

Photos: Mikael Soininen


The Valmet Automotive factory in the coastal town of Uusikaupunki in Finland’s southwest is well on track: production of the Mercedes-Benz GLC SUV commenced at full speed at the beginning of this year, while the manufacture of the German automaker’s A-series continues. Production facilities have been expanded and Valmet Automotive has recruited over a thousand new car mechanics and other employees.

 

What is the secret to the contract manufacturer’s success? “Our ability to start from zero and deliver a finished product is unparalleled,” says Kalle Nuutila, who works as a project and development manager at Valmet Automotive. With regard to the GLC project, he is responsible for delivery planning and management as well as related agreements.

Timely delivery: DB Schenker provides Valmet Automotive with parts from suppliers in Austria and Germany – by truck but also by rail and ferry. Photo: Deutsche Bahn AG / Michael Neuhaus
Timely delivery: DB Schenker provides Valmet Automotive with parts from suppliers in Austria and Germany – by truck but also by rail and ferry. Photo: Deutsche Bahn AG / Michael Neuhaus

In the automotive industry, contract manufacturers supplement the production capacity of their principals. Speed, reliability and quality are vital in this respect. Orders from car purchasers flow in the common order backlog of Daimler and Valmet Automotive, and from there, they are transferred to factories in accordance with the available capacity. Next, the necessary components are ordered from parts suppliers.

 

“Valmet Automotive builds a car as fast as Daimler, even though the distance to parts suppliers is up to one week from here,” Kalle Nuutila emphasizes. “Uusikaupunki harbor is located just a few kilometers from our factory. Finished vehicles can be shipped directly to their respective markets.” A precondition for this is that suppliers send the right parts and the transports stay within the agreed-on schedule. “Efficient and high-quality logistics is an important part of our competitiveness.”

PARTS GO TO FINLAND, EMPTY PACKAGE MATERIAL IS RETURNED

This is where DB Schenker comes into play: “The car factory has no buffer stocks, hence the warehouses are on wheels,” says Mihael Hagström, Sales Manager at the Finnish national subsidiary. DB Schenker ships parts from suppliers based in Austria and North Germany to Finland in scheduled land transports. Production material coming from the alpine country is transported in multimodal transport operations, with freight initially being shipped to the town of Wels by truck – in so-called milk runs as part loads in mega-trailers or as full truckload direct pick-ups. Once they arrive in Wels, the trailers are shifted to rail. Destination: Rostock in Germany’s northeastern region. From there, the cargo is shipped across the Baltic Sea by ferry to Hanko, the southernmost tip of continental Finland, where trucks take delivery of the trailers and transport them to the Valmet plant.

Close cooperation: Kalle Nuutila and Mihael Hagström are continually striving to make the contract manufacturer’s supply chain more reliable and efficient. Photo: Mikael Soininen
Close cooperation: Kalle Nuutila and Mihael Hagström are continually striving to make the contract manufacturer’s supply chain more reliable and efficient. Photo: Mikael Soininen

These consignments are supplemented by parts deliveries transported by truck from Germany’s northwest to Lübeck-Travemünde on the Baltic Sea. The port there has a direct ferry link to the harbor in Uusikaupunki, virtually on the customer’s doorstep. On the return leg, which follows the same route, the logistics service provider is tasked with shipping empty packaging material back. To ensure maximum transport quality, DB Schenker uses dedicated traffic control when working on behalf of Valmet Automotive.

 

The car factory manages its supply chain using the Valmet Automotive Transport Gateway (VATG) system, which helps plan the transports months ahead. The cooperation partners are provided with a notification of the following month’s transports four weeks in advance, and the information is detailed one week before transportation, says Kalle Nuutila.

 

The manager goes on to explain that in order to ensure the quality of the supply chain, Valmet Automotive keeps the goods flow as even and regular as they can. Changes are only made after careful consideration. “VATG is an important tool for both Valmet Automotive as well as DB Schenker when planning transports. Minor changes in production are not visible in the logistics chain, so we can focus better on our own work,” Mihael Hagström states.

CAPACITY ENABLES AGILITY

For Kalle Nuutila, it’s important that there is enough capacity for a transport operator, enabling speed and agility in exceptional situations. One such case was an accident at a chemical plant in Germany last fall. It put a stop to rail traffic in the surrounding area, and one of the trains affected was carrying trailers on the way to Uusikaupunki. “It was not possible to use trains, so road transport was the only option. It required agility; we organized towing vehicles for dozens of trailers,” Hagström recalls.

 

According to Nuutila, Valmet Automotive prefers to work with big companies such as DB Schenker because they have proven service production ability. The fact that the collaboration enables the use of an international network as well as the partner’s ability to produce relevant and real-time data about the transports also weighted in favor of DB Schenker. “Cost was not the most important selection criterion. We must be able to rely on the service to work,” says Nuutila. “Our cooperation functions well at all levels. If there are challenges, we look for a solution together. This is a process of continuous learning.”

Location on the upswing: Valmet Automotive has recently greatly expanded the plant in Uusikaupunki – seen here in the slideshow are scenes from the body shop and assembly hall – and recruited more than 1,000 new employees

Photos: Valmet Automotive



Valmet Automotive in a nutshell

  • One of the world’s leading contract manufacturers
  • Has manufactured over 1.2 million cars
  • Offers engineering, manufacturing and business services, as well as roof systems for convertibles
  • Specialties are premium cars, convertibles and electric vehicles
  • Employs over 2,500 skilled workers

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