A Critical Link in Mitsubishi’s Supply Chain
Mitsubishi Motors — Normal, IL
Mitsubishi Motors manufactures Outlander Sport vehicles in Normal, Illinois and uses freight rail via the NEC to transport vehicles to the Port of Baltimore for export to various countries in South America, Africa, and Eastern Europe. This year, approximately 30,000 vehicles manufactured in Normal will travel on the NEC to be exported via the Port of Baltimore.
As part of this process, Mitsubishi reserves space for vehicle exports on oceangoing vessels based on the time they are scheduled to arrive at the Port. Mitsubishi calculates production in terms of units per day, and the time it takes them to travel on rail to port. Since Mitsubishi cannot send a partial shipment, a delay in part of a vessel-bound shipment of automobiles arriving may cause hundreds of automobiles to be held at the port, increasing the time to market and resulting in additional costs. Occasionally an entire shipment of cars is held for weeks for a single delayed unit.
As noted by Curt Parrish, Manager of Baltimore Port Operations for Mitsubishi, access to the NEC is an important factor for the future growth of Mitsubishi’s operations in the United States. The Normal plant has been very successful for Mitsubishi, and an expansion of the plant (including the introduction of a second vehicle model) is under consideration. The competition for future manufacturing activity, however, is intense. Mitsubishi is transitioning to a single manufacturing plant layout that will allow any vehicle model to be produced at any plant worldwide, meaning the Normal plant will have greater global competition. Every cost, including the cost of transporting automobiles to market, is factored into the decision making. Mr. Parrish described the operations at the Port of Baltimore as a “lifeline” for the plant in Normal. Mitsubishi also uses the NEC to transport automobiles for domestic consumption in the Northeast to Wilmington.
The Role of the NEC in Mitsubishi’s Supply Chain.