TYRE CITY: A STRATEGIC HUB
With an 80.000-square-meter logistics hub, totally dedicated to managing over 3 million tires and 130.000 shipments throughout Italy every year, CEVA Logistics Italia laid its strategic cornerstone and called it Tyre City, providing manufacturers, wholesalers and distributors with the opportunity to gain, through their logistics, a real competitive edge.
A real cornerstone of the automotive industry, the tire, as a product, is much more complex than it might seem at first glance. The sector’s specialists are well aware of this fact, and so are a number of logistics giants. It is no coincidence, therefore, that last June, in Somaglia (near Lodi), CEVA Logistics, one of the sectors main global players, opened TyreCity. After books, medicines and consumer electronics, TyreCity represents a further step in CEVA’s quest to establish logistics hubs for each product sector, betting on what the company management considers to be one of the most strategic sectors.
“40% of CEVA’s turnover comes from the automotive industrial sector, for example cars, motorbikes, trucks, earthmoving equipment, tractors and so on”, says Davide Albanesi, sales director of CEVA. “We have very specific skills in this sector and not only in Italy, where we move more than 10 million tires every year, but also in Europe and around the world”. Tires are not just an essential automotive element, but a product that requires also large storing space and specialized handling; not to mention the hectic movement of millions of tires during seasonal replacements.
Large spaces and dedicated services
Faced with this complexity, the best answer, according to CEVA, is a dedicated and highly skilled service. In order to give life to a project such as a "TyreCity", says Davide Albanesi, huge volumes are needed. With 80.000 square meters entirely covered, Tyre City is capable of handling over 3 million items and more than 130.000 shipments every year for a total of 40.000 tons of delivered goods. Reduced lead times and costs, greater economies of scale, more sustainability, greater performance, efficiency and ultimately, customer satisfaction (multinationals, wholesalers and distributors), and, last but certainly not least, also the satisfaction of the product’s end users.
The real strength of TyreCity is the ability to meet the client’s specific needs, also "on demand": from stock and overstock management to distribution services throughout the national territory (or part of it), not to mention highly specialized services, the real added value for the business, such as "Tyre Hotel", that allows retailers to temporarily deposit their stocks of summer or winter tires during seasonal replacements, optimizing their own stock management.
The password: “logistics cooperation”
TyreCity is a truly dedicated logistics hub with a number of clients. To date, five companies have decided to “take up residence” inside CEVA Logistics TyreCity. Among these we find premium manufacturers such as Continental, that uses this hub to manage and distribute its stock of tires in the northern part of the country or throughout the whole of it. Then there is a large French producer, whose logistics and distribution has been managed by CEVA, for some time now, in two regional distribution centers, and now relies on TyreCity for some value-added activities, such as "Tyre Hotel". TyreCity also hosts some of the largest tire distributors, such as Fintyre, whose “freight management” is performed by CEVA Logistics, in particular imports from the Far East, as well as its buffer stock, i.e. the tire surplus coming from the nine Fintyre depots found throughout Italy.
Just as other CEVA logistics hubs, TyreCity is based on a sort of “logistics cooperation”. By sharing technical skills, premises and transport, companies can benefit from improved economies of scale thanks to reduced fixed overheads and operational costs, such as stocks, as well as inbound and outbound freight, with reduced lead times, more speed, flexibility and a generally higher quality of the services. The benefits stemming from this collaborative spirit can be felt throughout the supply chain. Benefits felt not only by manufacturers, thanks to the reduced lead times (24/72 hour delivery service, including islands, and even “same-day-delivery services”), but also for wholesalers and large distributors, with their frantic distribution operations.
Services and benefits for the whole supply chain
CEVA Logistics’ recent strategic policy is not just aimed at meeting the needs of large tire manufacturers, but also, as Davide Albanesi explains, taking into consideration the needs of the distribution chain. “This is what the market is asking. Recently some wholesalers have grown really big, and are now looking at outsourcing their stocks, in part or completely”. Relying on CEVA and TyreCity, they can contain their fixed overheads and still receive deliveries once or twice every day.
Besides TyreCity, CEVA’s offer varies between the logistics management of a client from CEVA’s premises as well as “in house”, directly from the client’s structure, providing the best business advice aimed at creating a winning strategy, for example the adoption of IT equipment needed to perform important market analysis and forecasts. Some distributors forfeit the possibility to grow nationally due to the higher costs involved. Thanks to its widespread presence on the Italian territory, CEVA can offer a flexible physical support.
The company is therefore now aiming to extend its policy of "collaborative logistics" also to tire-related complementary product lines, in the belief that it is possible to create economies of scale that will benefit everyone involved. "What we're doing represents a first attempt to 'collaborative logistics' in the automotive sector," sums up the sales director of CEVA Logistics Italia.
Not just “TyreCity”
TyreCity is, however, only a symbol of a much broader strategy designed by CEVA Logistics for the world of tires. The next focus, as Davide Albanesi reveals, is centered around "reverse logistics", intended as a support for the disposal or the retreading of used tires. CEVA is looking at entering this particular area of the tire industry as well.
There are several options being considered. One deals with the management of certain phases, such as the withdrawal of tires, delivering them to a retreading company and subsequently distributing the finished product, or the disposal of tires that cannot be retreaded. Another option relates to centralizing all activities at a specialized CEVA depot, where each customer has its own dedicated technical area to determine whether a tire is suitable to be retreaded or otherwise.
The ultimate goal is to create an efficient logistics system by sharing structures and high-level skills, thus raising levels of competitiveness and satisfaction of all the stakeholders concerned.
TYRECITY: THE FIGURES
- 80.000 covered square meters
- + 3.000.000 items per year
- + 130.000 shipments per year
- + 40.000 tons of goods delivered on the domestic market
WHAT IS CEVA
CEVA Logistics, a leading global logistics operators, characterized by a non-asset based strategy, offers solutions for large and medium-sized national and multinational companies. Approximately 44,000 employees in more than 170 countries are committed to providing solutions for a more efficient supply chain in different sectors, where CEVA supplies its operational expertise and skills to provide adequate services through an integrated network.
Source: CEVA - www.cevalogistics.com