Automotive Warehousing and Fulfillment: The Best Practices

Steve Schlecht
Written by
Steve Schlecht
Published on
June 7, 2024
Warehouse for Automotive parts

We have provided warehousing services for automotive manufacturers such as Ford and John Deere in various ways over our 100 years of business at Buske. Automotive warehousing and fulfillment services are one of the core services as of late. This article will discuss the best practices we have learned when working with automotive manufacturers and their suppliers. 

What is Automotive Warehousing and Fulfillment?

Automotive warehousing and fulfillment involves not only the storage and distribution of automotive parts and vehicles but also the entire process of handling orders and shipping them to the end customers. 

This includes inventory management, order processing, picking and packing, and shipping automotive products to dealerships.

Automotive warehousing and fulfillment aim to streamline the entire supply chain process, ensuring that automotive components and vehicles reach their destinations efficiently and on time.

The Importance of Warehousing and Fulfillment

In the automotive industry, there is a great emphasis put on precision and efficiency because of the costs of downtime on a manufacturing line. Given this, logistics solutions such as warehousing and fulfillment services are a critical component in automotive supply chains. 

Automotive warehouses manage a wide variety of products, from small parts like screws and bolts to large items like engines and body panels. Some parts are different in size by only 1 centimeter and are tough to distinguish with the human eye. We use a WMS to avoid mis-picks but it’s critical to have a robust solution because the consequences are high. Those consequences could look like manufacturer recalls and vehicles breaking down on roads.

Maintaining strong warehousing processes and standards provides several benefits to manufacturers and suppliers. They ensure quality, streamline operations, reduce costs, and enhance customer satisfaction by supporting production schedules. Additionally, they help minimize downtime and improve overall supply chain performance.

Best Practices for Automotive Warehousing

Here are some of the best practices to remember when providing warehousing services in the auto industry.

Selecting a Strategic Location

When looking for a place to set up a warehouse, make sure it is in a strategic location.

Choosing warehouse locations close to suppliers and manufacturing plants reduces transportation time and costs, ensuring cost-effective and timely delivery of parts. For instance, regional automotive warehousing near key manufacturing hubs can significantly enhance supply chain efficiency.

Another consideration is their distance to major transportation hubs like highways, ports, and railways. This accessibility facilitates faster and more efficient movement of goods, a critical factor in automotive logistics.

Climate Controlled Facilities

In warehouses with high humidity, parts are susceptible to corrosion. Suppliers often apply zinc coating to metal components to ensure resistance over several years. However, there are occasions when this protective measure is not taken. It is crucial for suppliers to collaborate with their 3PLs to establish acceptable climate parameters for storage. Failure to do so can result in corrosion, turning these parts into potential liabilities for the supplier.

Warehouse Layout and Design

When building a warehouse, one must consider the best layout and design. It needs to have an optimized layout that improves the efficiency of how parts and products will flow.

An optimized layout maximizes storage capacity and minimizes wasted space. Vertical storage solutions and modular shelving can significantly enhance space utilization in fulfillment functions within auto warehousing.

In our automotive sequencing operations at Buske, we design some of our facilities to have an overhead crane to move parts around. Not only is it efficient, but it promotes a safe workplace in our warehouses.

At Buske Logistics, our typical approach is to work collaboratively with our clients to determine an acceptable solution. That’s important because additional capital expenditures like overhead cranes do impact pricing. 

Outsourcing Inventory

Another benefit of using an outsourced automotive warehouse is to avoid excess inventory on a manufacturing floor in accordance with Just-in-Time (JIT) inventory methodologies.

By outsourcing stock both before and after manufacturing to automotive warehousing, a manufacturer improves cash flow on their balance sheet by reducing ownership of inventory.  This practice ensures that parts are only in the custody of the manufacturer when value is being applied, such as vehicle assembly.

Technology Integration

An efficient warehouse management system provides many advantages for the automotive industry. It’s a must if you want to ensure that operations and the supply chain run smoothly.

Such a system helps streamline warehouse operations by automating order picking, inventory tracking, and shipping tasks. It enhances efficiency and accuracy.

Additionally, businesses may also use automation and robotics to manage the warehouse. Technological advancements, such as automated guided vehicles (AGVs) and robotic arms, increase productivity and reduce labor costs by performing repetitive tasks precisely.

Quality Control Measures

Implementing strict inspection and testing protocols ensures that all parts meet quality standards before shipping. This practice reduces the risk of defective products reaching customers.

Another form of quality control is establishing handling and storage standards. These standards prevent the damage and deterioration of parts. Make sure to use appropriate storage conditions and protective packaging.

We are always keen on and committed to maintaining a high-quality service standard. Buske Logistics is committed to continuing to improve our quality control measures.

Best Practices for Automotive Fulfillment

Fulfillment services also need to be precise and efficient to reinforce customer trust. Below are the best practices for automotive fulfillment.

Order Accuracy and Speed

Accurate but speedy services give logistics providers an edge against the competition. Streamlined order processing involves automating workflows and integrating systems to achieve these standards. This reduces lead times and improves customer satisfaction.

Along with streamlining operations, use automated systems like conveyor belts and sorting machines to speed up the picking and packing process. This ensures that orders are fulfilled accurately and promptly in delivery timelines.

Managing Returns and Reverse Logistics

There are times when items need to be returned. The return processing systems need to be quick and precise when handling these. This helps reduce the impact on inventory and customer satisfaction. Automated return labels and processing workflows are beneficial.

Businesses may also implement refurbishment and recycling programs for returned products. Taking this step can reduce waste and generate additional revenue streams.

Customization and Personalization

When entering both automotive warehousing and fulfillment, services must be able to handle custom orders and configurations. Some such customizations may include specific paint colors or part features.

For this, having a good WMS is needed to accurately store and ship unique parts. Value-Added Services like kitting, assembly, and customized packages, can also enhance client satisfaction.

Communication and Collaboration

Communication is key, especially in the automotive logistics industry. Given the numerous stakeholders involved, collaboration can help keep the supply chain running smoothly.

Service providers may share real-time data with all stakeholders, including OEMs, suppliers, and customers. Cloud-based platforms are great tools for facilitating instant communication.

Sustainability and Green Logistics in Auto Warehousing

Lead production, or keeping operations sustainable and environment-friendly, has become a top priority among many companies in the automotive industry. Here are the best practices for achieving a sustainable workflow.

Reducing Carbon Footprint

We make every effort to support our client’s goals of reducing their carbon footprint across the supply chain. In our warehousing facilities, we use LED lighting, solar panels in Texas and California, and energy management systems to reduce the environmental impact and operational costs.

Other than sustainable energy, packaging materials for transport also help reduce your carbon footprint. There are recyclable, biodegradable, and many other options. This minimizes environmental impact and appeals to eco-conscious consumers.

Implementing Green Transportation Practices

We make routine shuttle movements between our warehouses and automotive plants in Chicago and Louisville as one example. While it is not currently a request, our clients have identified using electric vehicles to bring down transportation costs and ultimately reduce their carbon footprint. 

Another opportunity is optimizing the transport route using route optimizing solutions that help minimize carbon emissions. Finding the most efficient delivery route lowers your fleet’s fuel consumption and carbon footprint, too.

Waste Management and Recycling Programs

Another easy practice to support sustainability is implementing comprehensive waste management and recycling programs within warehouses that reduce landfill waste and promote environmental sustainability. Recycling packaging materials and repurposing waste products are effective strategies.

Maintaining Efficient Warehouse Operations

Effective warehousing and fulfillment are crucial for maintaining operational efficiency and customer satisfaction in the fast-paced automotive industry. Companies can optimize their supply chain operations and achieve long-term success by adopting best practices in location selection, inventory management, technology integration, and sustainability.

If you need automotive parts warehousing and fulfillment services, Buske Logistics is ready to help you. Contact us through this form or call us at +1 (618) 931-6091.