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Component suppliers are not the only ones burdened with meeting the ever-increasing demands from OEMs. The bar has also been raised for logistics providers who now depend on a continuous innovation strategy to keep up with their clients, says Rafael Mora, CSO/Sales Box Leader of Corrubox.
“New-vehicle launches, which were previously scheduled every four years, are now being accelerated and that puts a strain on the whole manufacturing chain,” says Mora. “Stricter response times generate complications at an operational level, including logistics operations.” Originally a packaging provider, Corrubox evolved to a logistics provider after recognizing the pressing needs of its clients and the growing opportunity in an industry with uninterrupted growth. “Our experience already makes us stand out as an excellent alternative for packaging solutions,” says Mora. “However, we have gradually attracted more clients with our logistics offering, providing an integral service that includes packaging and logistics.” The company covers everything from design of packaging solutions, to component packaging and storage and even exports if the client demands it, transforming Corrubox into a 3PL provider with a core business in packaging. That being said, packaging remains the core of the company.
The company works with OEMs, Tier 1 and Tier 2 companies but its logistics offering has been particularly attractive to OEMs. Mora’s strategy has been oriented toward establishing corporate accounts, focusing on large production consortia instead of going after individual plants. The business model has paid off, delivering growth in sales of approximately 70 percent by the end of 2017. Although the company has not approached clusters with a regionalization strategy, it has participated in industry events related to clusters and associations, which has opened the doors to Corrubox in new markets such as the US and Canada. “We are now in negotiations with several companies in these countries to develop new business in the north of Mexico and the south of the US,” says Mora.
Evolving into a logistics provider has not been easy but flexibility has been a key factor in adapting to its clients’ needs and supporting growth, according to Mora. Developing a strong supplier base has been particularly challenging for the company to ensure a quality service. Corrubox has already worked with different shipping companies and Mora says one of the key elements to consider when selecting a new provider is to make sure it has the necessary infrastructure to ensure a continuous operation. The Mexican industry is growing at an accelerated pace and there is still opportunity for more players to participate as logistics and service suppliers to cater to the demand of arriving automotive investors.
Mora projects similar growth for Corrubox in 2018 but to manage that, the company will have to keep innovating in its service portfolio and its own operations. The company has operated according to just-in-time standards for over 20 years, which is what led it to open eight branches in different states. “We offer clients emergency stock and just-in-time deliveries,” he says. “With our logistics services, we are now even participating in just-in-sequence operations and material administration of both packaging and auto parts that we store and deliver in the order the client wants them in its plant.”
However, just like in any other industry segment, there is always room for improvement. In packaging, Mora says the company has researched new designs to reduce costs and provide more environmentally-friendly solutions to the client. Corrubox’s innovation strategy has helped it optimize logistics operations by designing packages that make the best use of the available space in a shipment or container. “Optimizing space results in cost benefits for the client and helps us be more sustainable by reducing use of raw materials and fuel consumption in transportation,” says Mora. “We already have over 8,000 packaging solutions that have been tested in the industry for different makes, models and part numbers.”
Digitalization has also been an innovation focus for Corrubox. The company has worked on systems to help clients access their inventories at any moment of the day, providing real-time information on the production and delivery times of their components. “These platforms function like an internal ERP that we can link to clients’ management systems, whether those are SAP or Oracle,” says Mora.