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Being close to local markets enhances profitability,<br />
in particular as a result of significantly lower logistic<br />
costs.The international expansion this entails is conducted<br />
in full compliance with Group standards for environmental<br />
protection and respect for employee rights, backed<br />
by close cooperation with local suppliers and building<br />
on human resources policies with worldwide scope.<br />
Other key developments in <strong>2005</strong> included moves to adapt<br />
to variations in demand, demonstrating <strong>Renault</strong>'s<br />
capacity to take change in its stride. In particular,<br />
this involved the introduction of a night shift at the Flins<br />
plant in France, redistribution of staff at Valladolid<br />
and Palencia sites in Spain, reorganization of production<br />
flows at Sandouville in France and rescheduling<br />
in response to outside events affecting supplies. Plants<br />
thus successfully adapted to both rises and falls<br />
in required output levels, maintaining margins while<br />
at the same time meeting customer delivery times.<br />
Adjustments were made in accordance with<br />
the agreements on variable work schedules reached<br />
with employee representatives at each site.<br />
All told, <strong>Renault</strong> production facilities include 27 sites<br />
in Europe, Asia, America, Latin America and North<br />
Africa. The Group also benefits from the support<br />
of Nissan production facilities in Mexico and Spain,<br />
while Nissan uses <strong>Renault</strong>'s plant for light commercial<br />
vehicles in Curitiba, Brazil.<br />
The <strong>Renault</strong> Production Way – the key to success<br />
Deployed since 2000, the <strong>Renault</strong> Production Way structures <strong>Renault</strong>'s drive to rank among the most<br />
efficient manufacturers anywhere in the world. Drawing on the experience built up over its own<br />
history and best practices developed through the Nissan Production Way, the <strong>Renault</strong> Production Way<br />
rallies all those concerned with the production process – from designers to buyers, suppliers<br />
and logistic providers as well as factory staff – to shared goals, principles and standards.<br />
Over recent years, it has provided invaluable support for international growth and is now operational<br />
at all sites, ensuring uniformly high standards of quality and organizational efficiency, making <strong>Renault</strong><br />
one of the world’s most competitive manufacturers. Placing special emphasis on the united<br />
contributions of all staff members, it naturally entails a major commitment to the development<br />
of know-how at all levels and makes environmental standards and quality working conditions<br />
an integral part of day-to-day operation.<br />
A competitive<br />
international group<br />
The <strong>Renault</strong><br />
Production Way<br />
focuses on people<br />
as the key<br />
to performance,<br />
making the<br />
development<br />
of competencies<br />
and training for all<br />
high priorities.<br />
What was the focus of<br />
progress in logistics in<br />
<strong>2005</strong>?<br />
Clio III – our strongest start<br />
ever. We delivered agreed<br />
quantities on time to all our<br />
distributors in full compliance<br />
with schedules. Startups<br />
for production of Logan<br />
in Russia, Morocco and<br />
Colombia also went well.<br />
As for other production,<br />
deliveries less than three<br />
days late were up to 80%<br />
in <strong>2005</strong>, compared with<br />
60% in 1999, and we even<br />
achieved a new record<br />
of 92% in one week during<br />
September.<br />
What about parts?<br />
In Romania, we successfully<br />
launched a new International<br />
Logistics Network* center<br />
for delivery of parts to all<br />
Logan manufacturing sites.<br />
In time, it will be the largest<br />
in the <strong>Renault</strong> group. At<br />
assembly plants, we have<br />
reached an 88% compliance<br />
rate for supplier deliveries,<br />
up from 80% in 2003.<br />
And the number of vehicles<br />
at these plants affected by<br />
a supply problem fell from<br />
3.2% to 1.2% in two years.<br />
How have you dealt<br />
with the jump in oil<br />
prices?<br />
Fuel accounts for 20 to 30%<br />
of our costs, but despite<br />
the higher prices we were able<br />
to cut the bill at constant<br />
business scope by 2.3%<br />
for parts transport and 1.1%<br />
for vehicle transport. We did<br />
that by negotiating hard and<br />
raising productivity, reengineering<br />
distribution circuits<br />
to ensure fuller loads on<br />
trucks, redesigning packaging<br />
and parts, and so on.<br />
*International Logistics Network:<br />
Shipment of CKD kits to be<br />
assembled at other sites.<br />
"CLIO III – OUR STRONGEST START EVER"<br />
Bruno Ancelin<br />
Vice President,<br />
Logistics<br />
<strong>2005</strong> <strong>Renault</strong> Annual Report<br />
39
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