The Vehicle Processing Center, an essential knot in car logistics

How does a Vehicle Processing Center work?

In one sentence, Vehicle Processing Centers (VPCs) play a crucial role in the automotive supply chain, acting as logistical hubs for inspecting, customising, and distributing vehicles from manufacturers to dealerships. But what do they do in detail?

Let's examine VPCs from a dealership's perspective. Importing a car typically starts with the vehicle being taken off the carrier at the wharf.

The first thing that is always done is to check the unloaded car for damages. These can be manufacturing defects or damage that occurred during transport, such as front bumper scrapes and alloy wheel scrapes. This first check is documented before the car is brought into the VPC compound to prepare it for delivery.

A vehicle can be serviced in a VPC with a breadth of services, such as adding an owner's handbook and floor mats or fitting the vehicle up from a fleet vehicle requirement. Some cars come fully built, and some need to be built. In general, this is known as accessorisation.

For customers who order cars without specific equipment or build, the VPC will pre-build them, like fitting a multimedia unit, Bluetooth capabilities, or backup cameras. Once the car is allocated to a dealer or an end customer, a series of smaller services, such as adding a compliance plate and giving it a wash and check, are performed.

Some VPCs also offer specialised and extensive vehicle build-ups, which are, in general, fleet build-ups to support specific customer requirements. For example, customers in the infrastructure business may have a fleet of medium pickups that need fitting out with canopies, lights, communication equipment or suspension kits. Sometimes, VPCs also do registration services for company vehicles.

If imported vehicles show minor damages, mechanical repair and paint rectification are performed. A Vehicle Processing Center can fix any damages, paint marks, or dents to new cars before they end up in the showroom. Additionally, some countries like Australia, which has vigorous quarantine regulations, ask for safe procedures for imported cars. Bugs, pollen, and seeds are the main reasons for decontamination activities.

Another aspect of VPC tasks is storage and vehicle yard management. Vehicles are stored for a different length of time. In extreme cases, they are used as outsourced parking lots for OEMs. That's where vehicle preservation comes into play. When cars are parked for a more extended period, vehicle preservation is necessary to clean them from dust, recharge the battery, check and rotate the tyres, and do some underbody checks. The interval of preservation tasks depends on the brand and model but is mostly based on customer requirements. The VPC team might have to execute preservation work every seven days, every 14 days, or every month. The longer the storage period, the more the character of preservation tasks changes: Rotating tyres may be done every 14 days, and underbody checks every 60 days. Protection is a special part of preservation: Hailstorms are a major adversary for big car compounds. Hailstorm nets are a protective measure to safeguard parked vehicles in the open.

Finally, the pre-delivery inspection (PDI) is the final check before a car is sent to a dealer or end customer. It includes a detailed survey of the vehicle's interior and exterior to ensure it is clean and damage-free.

So, the main job of a VPC is to maintain and repair the promised quality of cars before they are shipped to dealers and customers.

End-to-end vehicle logistics offering

In the finished vehicle logistics supply chain, a Vehicle Processing Center plays a central role as an intermediate step between vehicle production and final delivery to dealerships or customers. After vehicles are manufactured, they are transported from the factory, often by rail, truck, or ship, to the VPC. This step is widespread for international shipments or long-distance domestic deliveries. To make things faster, VPCs at the wharf act as service centres directly where the cars are unloaded instead of transporting them into an inland facility.

Once at the VPC, vehicles undergo a variety of processes to ensure they are ready for sale, as discussed above. These processes include quality inspections, customisation, preservation and PDI. Once processing is complete, the VPC coordinates the final transportation of the vehicles to dealerships or customers. This final leg of the journey is typically handled by third-party logistics companies that specialise in automotive transport, usually via trucks. The distribution of these cars requires a truck fleet and the planning of needed capacity from one VPC to another or to a dealer. The transport planning must consider using different types of trailers for different cars.

The VPC thus acts as a critical car logistics and preparation hub in the vehicle distribution process.

Information Management at the Vehicle Processing Center

A Vehicle Processing Center processes tens or hundreds of thousands of vehicles annually. Because VPCs work for many customers, they always encounter numerous car brand , models, and specifications. Consequently, information management on how to handle each car is crucial.

VPCs also support parts operation and supply customers nationwide, including inventory management and storage services. Customers have their own rules about how and where cars are stored and parked.

For optimal processes at Vehicle Processing Centers (VPCs), a wide range of information is necessary to ensure smooth operations, quality control, and efficient logistics management. The key types of information required include:

Vehicle Information:

• VIN (Vehicle Identification Number): Unique identifier for tracking and managing each vehicle.
• Model, Make, and Trim Details: Ensures accurate customisation and processing based on the vehicle's specifications.
• Production Status: Information on the vehicle's condition when leaving the factory, such as any special handling or pre-existing issues.

Transportation and Arrival Data:

• Expected Arrival Time: Accurate ETA to prepare the VPC for receiving shipments and allocate resources.
• Mode of Transport: Whether the vehicle arrives by ship, rail, or truck impacts unloading procedures and storage requirements.
• Shipping Documentation: Bill of lading, customs information (for international shipments), and import/export declarations to verify ownership and clear regulatory checks.

Customisation and Work Orders:

• Dealership or Customer Orders: Detailed instructions on what modifications, accessories, or custom features need to be added before delivery.
• Pre-delivery Inspection Requirements: Specifications for quality checks, repairs, or adjustments that need to be done based on manufacturer and dealer requirements.

Quality Control and Inspection Data:

• Inspection Checklists: Guidelines for identifying and logging any defects, damages, or discrepancies during vehicle inspections.
• Damage Reports: Details of any damage found upon arrival, often requiring photographic evidence and logging for insurance claims or warranty work.
• Service Records: If minor repairs are needed, these records track what work has been done on the vehicle.

Inventory Management Information:

• Stock Levels: Real-time data on how many vehicles are in the VPC, organised by model, make, or shipment batch.
• Storage Location Information: Tracking vehicles within the VPC yard or storage area for quick retrieval and efficient space management.

Workforce and Resource Allocation:

• Labour Scheduling: Information about staffing needs based on vehicle arrival volumes and processing demands.
• Equipment Availability: Data on available tools, machinery (such as car lifts or cleaning stations), and bays for repair/customisation to avoid bottlenecks.

Regulatory Compliance Information:

• Emissions or Safety Certifications: Information on regulations that need to be met, such as emissions checks or safety standards for specific markets.
• Customs and Import/Export Compliance: Particularly for international vehicles, ensuring all regulatory documents are cleared before vehicles can be processed and delivered.

Delivery and Distribution Data:

• Dealership or Customer Locations: Precise information on where each vehicle is being sent, along with delivery timelines.
• Logistics Schedules: Coordinating with third-party transport providers to schedule pickups and deliveries, ensuring smooth transitions from the VPC to the next point.

Performance Metrics:

• Cycle Time for Processing: Data on how long each vehicle takes to move through the processing stages, enabling optimisation of workflows.
• Error or Damage Rates: To monitor quality control and identify areas for improvement in handling and inspections.

Technology and IT Systems:

• Real-time Data Integration: Systems that integrate data from production, transportation, and dealer networks to provide visibility into vehicle status at all times.
• Automation Systems: Information on how to leverage automated systems for tasks like tracking vehicles, scheduling work, or alerting workers to incoming shipments.

Collecting and utilising this comprehensive information helps VPCs operate efficiently, maintain high-quality standards, and ensure vehicles are prepared for timely delivery to dealerships or customers.

Inventory management

In the context of a Vehicle Processing Center, inventory management, specifically related to storage location information, is crucial for ensuring smooth operations, reducing delays, and optimising space utilisation. Detailed and well-organised storage location data allows for accurate tracking of each vehicle throughout its stay at the centre, from arrival to final dispatch. So what is needed to safeguard valuable inventory management information related to storage location?

Real-Time Vehicle Location Tracking

For optimal inventory management, each vehicle's precise storage location must be tracked in real time. This typically involves assigning a unique identifier to each parking spot, bay, or section of the VPC. The storage location information needs to include:

• Yard Map Integration: A digital or physical map of the VPC yard that divides the area into sections, rows, and individual spaces, all of which are clearly labeled and updated in real-time systems.
• Vehicle-to-Spot Assignment: When a vehicle arrives at the VPC, it is assigned a specific location in the yard. This assignment is logged into an inventory management system so that personnel can quickly locate it.
• GPS or RFID Technology: Some advanced VPCs may use GPS systems or RFID tags attached to each vehicle to track their exact position within the facility, ensuring they can be located quickly, even in large yards.

Storage Duration Tracking

Furthermore, it's important to have data on how long each vehicle has been stored at the VPC. This involves logging the:

• Date and Time of Arrival: This information is necessary to ensure that vehicles run through preservation intervals according to the required rules.
• Expected Time in Storage: For vehicles awaiting customisation, repairs, or delayed shipments, having expected dispatch times helps prioritise their processing.
• Overdue Alerts: If a vehicle remains in storage longer than planned, automated alerts can be triggered to highlight potential delays or bottlenecks.

Space Utilisation and Allocation

Effective inventory management requires optimising the use of space to maximise the number of vehicles that can be stored without congestion. This information includes:

• Space Utilisation Rates: Regularly updated data on how much of the VPC's yard or warehouse space is currently occupied, allowing management to make adjustments and avoid overloading certain areas.
• Dynamic Allocation: Based on vehicle type, size, and priority, the system should allocate specific storage areas efficiently. For example, compact cars may be grouped in one section while larger SUVs or trucks may need more space in another.
• Zone Segmentation: The yard is often divided into zones for different purposes, such as areas for vehicles requiring customisation, those that are ready for dispatch, and those awaiting inspection. The system needs to track which vehicles are in which zone.

Grouping and Batch Information

Vehicles are often grouped together based on various criteria to streamline processes. The system must have detailed information about:

• Batch or Shipment Grouping: Vehicles arriving on the same transport (ship, rail, or truck) may be grouped together in the yard. This makes it easier to process vehicles in batches for inspection, customisation, or loading onto outbound transport.
• Priority Levels: Vehicles may be categorised based on the urgency of their processing (e.g., vehicles ordered for a dealership with high priority). The inventory system must be able to track these priority designations and adjust storage locations accordingly.
• Vehicle Status: The current status of each vehicle—whether it is awaiting inspection, in the process of customisation, or ready for dispatch—needs to be tracked in real-time. This helps in planning the next steps for each batch and determining optimal storage spots.

Movement Tracking within the VPC

Vehicles often move between different zones or areas within the VPC for various processing activities such as inspections, repairs, or customisation. The system must accurately track:

• Vehicle Movements: Every time a vehicle is moved from one location to another (for example, from the inspection bay to a storage area), it must be logged in the system to update the real-time storage location.
• Reason for Movement: It's also necessary to record why the vehicle was moved, whether for inspection, customisation, repair, or preparation for final dispatch.

Handling Multiple VPC Locations

Some automotive logistics companies operate multiple VPCs or have large VPCs with different storage lots. The inventory management system should be able to handle:

• Cross-Facility Tracking: If vehicles are transferred between different VPCs or storage areas within a large facility, their location must be updated immediately to avoid confusion or loss.
• Yard-to-Warehouse Movement: In some VPCs, vehicles may be moved from an outdoor storage yard to a warehouse to protect against weather or security. This movement must be tracked accurately to maintain a clear overview of inventory.

Integration with Delivery and Dispatch Systems

The storage location data must be tightly integrated with the dispatch and delivery scheduling system. This ensures:

• Optimised Retrieval: When a vehicle is scheduled for delivery, the system should automatically generate a plan for the most efficient retrieval path from its current location to the dispatch area.
• Staging Area Tracking: Vehicles ready for dispatch are often moved to a staging area for loading onto trucks or other transport vehicles. The system must track when and where each vehicle is staged for pickup.
• Load Planning: The location of vehicles within the VPC yard should be optimised to minimise movement during the final dispatch phase, allowing for efficient loading of outbound transport.

Damage Prevention and Monitoring

Storage location data can also include information about environmental risks or conditions to protect vehicles from damage while in storage:

• Environmental Zones: If certain areas of the yard are exposed to weather conditions or environmental risks (like flooding), these areas may require special monitoring, and vehicle placement in these zones should be minimised.
• Security Zones: For high-value vehicles, special security measures may be in place, and the inventory system must track which vehicles are in these secure areas.

Audit and Reporting

To ensure operational efficiency and transparency, detailed storage location information must be available for:

• Audit Trails: The system should maintain a history of where each vehicle has been stored and moved, along with timestamps and reasons for movement. This is useful for auditing, error tracking, and ensuring compliance with procedures.
• Reporting: Regular reports on space utilisation, vehicle movement, and storage duration help managers optimise inventory management practices and address inefficiencies.

In summary, inventory management at a VPC requires real-time, accurate, and comprehensive information about where each vehicle is stored, how long it has been there, and how it will be retrieved for final dispatch. Advanced tracking technologies like RFID and GPS, combined with robust inventory management systems, ensure that VPCs can efficiently manage vehicle flow, avoid congestion, and streamline processing activities.

FAQ Vehicle Processing Centers (VPCs)

Why is accurate information critical for Vehicle Processing Centers?

Accurate information is essential for VPCs to manage the complex processes involved in vehicle logistics. VPCs handle a wide range of tasks, including inspections, customizations, repairs, and pre-delivery checks. Information such as vehicle specifications, transport schedules, and customer requirements helps ensure that each vehicle is processed efficiently and meets quality standards. Without precise data, there could be delays, errors in customization, or missed quality issues, all of which can disrupt the supply chain and impact customer satisfaction.

How does location data improve the efficiency of VPC operations?

Location data is crucial for tracking the exact position of every vehicle within the VPC’s yard or storage areas. Real-time tracking systems, like RFID or GPS, allow staff to quickly locate vehicles for inspections, customizations, or dispatch. By managing space effectively and monitoring storage duration, VPCs can prevent overcrowding, optimize vehicle movement, and reduce the time needed to retrieve vehicles for delivery. This ensures a smooth flow of vehicles through the centre and improves overall process efficiency.

What role do information systems play in VPC operations?

Information systems are the backbone of VPC operations, providing real-time data on vehicle status, inventory, and processing workflows. These systems integrate data from manufacturers, transportation providers, and dealerships, allowing VPCs to track vehicles from arrival to final delivery. Automated systems help manage scheduling, space allocation, and quality control, ensuring that each vehicle is processed accurately and efficiently. By centralizing and streamlining data, these systems help VPCs maintain high standards of quality, reduce errors, and optimize the overall logistics process.

Takeaway

Vehicle Processing Centers (VPCs) rely heavily on comprehensive and accurate information to maintain efficiency and quality in their operations. They manage complex workflows involving vehicle inspections, customizations, repairs, and pre-delivery checks. For seamless processes, VPCs require real-time data on vehicle locations, transportation schedules, and customer specifications. Tracking vehicle movements within the facility, monitoring storage times, and managing inventory are key to preventing delays and optimizing space utilization. Advanced information systems help integrate all these data points, enabling VPCs to handle thousands of vehicles smoothly and efficiently. To optimize VPC operations further, Asset Agent offers a robust solution that streamlines data management, enhances tracking, and ensures precise control over the entire vehicle processing workflow.

Delve deeper into one of our core topics: Car logistics

Sources:

(1) Supply Chain 101 www.youtube.com/watch?v=Tw1SLivUJrs