Mercedes revamps supply chain, logistics to trim costs

AR-307209957 (1)SPEYER, Germany – Mercedes-Benz aims to reduce logistics costs by about 20 percent per vehicle as the company invests hundreds of millions of euros in a sweeping global reorganization of its supply chain network.

The automaker has increased production outside of its German home over the past decade but many of the components used in its cars are still sourced from Europe.

The shift has increasingly stretched its supply chain because of the distances parts have to travel, placing a bigger strain on a system that is already trying to cope with record demand.

Logistics is a “very significant” cost position, according to Mercedes production and supply chain boss Markus Schaefer, who said supply chain costs can exceed manufacturing costs in some of the division’s lower-wage plants.

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