The Future Outlook For Tyre Supply Chain
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Spurred on by a natural commercial rivalry, manufacturers have initiated several projects that address the issues – be that in-house or through a consultancy – because none of them wants to be seen to be behind the curve
By Madhubhaskar Thiricode
September 2018
The challenges for the global tyre industry in the area of the finished tyre supply chain have risen in line with the growth of the industry. When we look at the topic as a whole, there are several trends that are very common across the business. Principal among them are digitalisation, automation and corporate social responsibility initiatives. Spurred on by a natural commercial rivalry, manufacturers have initiated several projects that address the issues – be that in-house or through a consultancy – because none of them wants to be seen to be behind the curve.
Digitalisation trends
The primary emphasis within the digitalisation trend has led to many manufacturers identifying new projects in the area of Work in Progress (WIP) material identification, digital tracking from raw material stores to finished goods plant warehouse and superior material accounting. Smart accounting involves having a complete picture by both quantity and volume during the production process to provide an accurate daily record of that process.
From green tyre coding before the tyres are cured through to finished tyres, a unique identification number can support digitalisation aspirations and also track all details of bill of material post production as well as after sales to customers. In the era of smart production and smart tyres the need for a smart tyre supply chain to complement this will be key for the leading manufacturers.
e-Commerce
The e commerce trend for on-line tyre purchase by customers has shown a new and different consumer behaviour that never previously existed in the industry. In turn this is making the manufacturer get closer to the consumer. The changes in this area had a direct impact on the tyre supply chain solution provider to ensure he is capable of accommodating these digitalisation needs and demands.
Unique Identification Number
A Unique Identification Number (UIN) for each tyre appears to be the other major factor that can complement the digitalisation trend with sensors which capture the performance data of tyres. For example in a truck fleet where data is stored in the cloud, the tyre ownership data and UIN also lead to an end of life tyre disposal data programme. Currently this is not practised by all manufacturers but it is a possibility for the future. The unique number can also help customer service efforts, because track and trace and is also very helpful in markets where there are counterfeit tyres which can be major challenge to the tyre manufacturers.
A variety of solutions are used by different manufacturers and while some adopt for bar code solutions a small handful – up to 5% globally - are pursuing RFID. What they all have in common is the interest in the digitalisation concept.
Possibilities
While UIN is certainly going to set the trend it makes Perspective Tyre Asia December 2018/January 2019 23 sense to look at the possibilities for the future when UIN is combined with intelligent packaging solutions. Among those are transit and storage modules like TyreCube. TyreCubes store tyres using RFID on them and that stored information can additionally provide:
- Automated and accurate finished goods material movement from quality check through to finished stores
- Gantry based control of finished tyre movement from Quality Control to loading bay
- Cloud based support for data entry to customer ERP (Enterprise Resource Planning)
- Accurate loading of tyres into containers / vehicles at plant
CEVA Logistics itself has entered a strategic alliance with Goodpack – the company behind TyreCube – to develop and design solutions across the tyre industry from start of production through to end of life.
End of Life tyres
End of Life tyres is still an area where an end-to-end solution across the industry is missing. Everyone talks about wanting a solution but concrete action is still pretty slow as many governments believe it is the manufacturer’s responsibility to devise the solution.
* TyreCube® is one of the solutions that supports the automation and digitalization aspirations. It also provides superior efficiency gains and cost savings in certain geographies for specific tire product categories.
The ability to link the UIN on each tyre to the RFID on the TyreCube® allows the data to be sent to the Cloud. This replaces the manual data entry by the warehouse operator bringing in accuracy and helps reduce resources.
UIN certainly goes one step ahead of existing DOT identification since it complements the digitalisation and automation dream and provide better visibility throughout the supply chain.
Aviation is a good example, where tyres reverse logistics plays a crucial role in both stock replacements at distribution centres and also in production planning departments at factories.
Where a re-tread is need the part wise inventory visibility available with this information provides greater efficiency to the overall supply chain compared to the supply chain practices in the past.
These emerging trends amount to a paradigm shift towards new supply chain processes for the tyre industry.
The implications for human health on the back of end of life tyres are many and varied and need urgent action. Burning tyres creates sulphur related toxic fumes. When they are put into landfill sites they can impact on ground water quality because petrochemical products do not disintegrate. When they are dumped or left in the open above land they can become breeding grounds for mosquitoes, other insects and even reptiles which all create their own health hazard issues.
Though not practised in today’s world, the reverse channelling of end of life tyres through retailers, collection points and supply chain industry providers using innovative packaging solutions would ensure the capturing of UIN numbers of the tyres which would then be handed over to certified companies who take responsibility for disposing them in environmental friendly way. Proof of that in the manufacturer’s data base with UIN numbers could be recorded which will demonstrate that full compliance occurred.
* Madhubhaskar Thirikode is Director – Global Tyre Sub Sector, CEVA Logistics
