Materials Management Operations GuidelineLogistics Evaluation

Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,January, 2003,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,January, 2003,*,Cliquez pour modifier le style du titre,Cliquez pour modifier les styles du texte du masque,Deuxime niveau,Troisime niveau,Quatrime niveau,Cinquime niveau,*,1,Materials Management Operations Guideline/Logistics Evaluation,November 2007,MMOG/LE,2,Agenda,Why MMOG/LE?,What is MMOG/LE?,Completing the Self-Assessment,Who is Requiring MMOG/LE?,MMOG/LE Key Criteria,AIAG/Odette MMOG/LE Benefits Survey,Customer Success Stories,Supporting Training and Documents Available,3,Why MMOG/LE?,4,Improving Supply Chain Delivery Performance,Gain control of processes,Reduce inventory carryingcosts, premium freight, rework, line stoppages, lead times,Gain control of supply chain,Increase inventory visibility,Reduce supply chain risk,Support continuous improvement,Increase customer satisfaction,Increase competitiveness,Actionline Magazine, Fall 2006,5,Who is implementing MMOG/LE?,Suppliers to comply with OEM requirements,Suppliers in emerging markets,Companies looking to,Reduce supply chain risks,Improve supply chain compliance and,Increase delivery and long distance performance,Regional industry associations,Brazil, Romania, China, etc.,MMOG/LE Outside the Automotive Industry,Universities,High Schools,Other non-automotive industries,Hospitals,Construction,Aerospace,Chemistry,Electronics,Industrial,Retail,6,7,What is MMOG/LE?,8,Principles of Global MMOG/LE,Recommended standard for materials and logistics,Self-assessment tool for identifying gaps in processes,Based on agreed business processes,By OEMs and suppliers,Ford, Chrysler, PSA, Renault, Volvo Car, Volvo Truck, etc.,Based on extensive, best practices,6 chapters,206 criteria,Determine current level of plant performance,9,Scoring Summary (ABC Classification),A Level,Supplier is considered to be at or near “,world class,” standards (90% or higher).,B Level,Supplier is deficient in two or more aspects of a given category or multiple categories (75% 90%). An action plan should be put in place and the corrective action should not require a significant amount of time to implement.,C Level,Supplier is deficient in,one,or more,critical or high impact,aspects (75% or less).,Action plans required to ensure deficiencies do not result in serious or prolonged issues to the customer.,10,MMOG/LE Self Evaluation Categories,Strategy and Improvement,Work Organization,Production and Capacity Planning,Customer Interface,Production and Product Control,Supplier Interface,MMOG/LE Translations,Available in 10 languages including:,English FrenchGerman,Spanish PortugueseChinese,RomanianCzechRussian,Over 2000 trained users in 16 different countries,11,What Does this Mean to Me?,Attend AIAG/Odette MMOG/LE standard training,Understanding and building a team to complete assessment,Complete self-assessment,Attend self-assessment education and review,Develop gap analysis and action plan customer, internal, and sub suppliers,Implement Action Plan,Internal processes and systems,Sub suppliers (e.g, Tier 2),Customer certifies self-assessment score,12,13,Completing the Self-Assessment,Download the Self Assessment,ENGLISH,FRENCH,CHINESE,14,15,1.2 Objectives,1.2.1,Objectives relative to the Materials Planning and Logistics function are defined, communicated and understood within the organization.,Why?,Objectives allow departments and employees to focus on areas of importance to achieve customer satisfaction and the organizations Materials Planning and Logistics strategy.,Criteria,F2,X,All objectives are measurable and consistent with the organizations Materials Planning and Logistics strategy.,EQOS - Inventory accuracy is measured by the cycle count program, supplier delivery performance, customer delivery performance.,F2,x,Objectives are accepted by all relevant functions and are clearly cascaded throughout the organization.,EQOS reviewed by operations and at staff meetings and posted monthly for all employees to review.,F2,Objectives are reviewed with senior management at planned intervals.,Complete the Form,Each Question is Yes (“,X,”) or No (,Blank,),Populates the gap analysis tab,15,16,Each Question is Weighted,F1,F2 Missing,six,results in “C” level,F3 Missing,one,results in “C” level,17,Submit Scoring Summary,Submit Gap Analysis L,ist of All Unanswered Questions (,Blank,),18,19,Who is requiring MMOG/LE?,20,OEM,EMEA,North,America,South,America,Asia/,Pacific,Frequency of Submission,MMOG/ LE v2 Usage,Comments,Europe,Yes,TBD,Yes,Annually,Next submittal,Yes,Yes,By Jan. 2008,Yes,Annually. This is a requirement for Q1.,Next submittal,Currently, all regions using MMOG/LE for Q1 require Level A except Europe and Asia Pacific, which currently accepts Level B.,Western Europe and Central and Eastern Europe only,Yes,New vehicle project,Next submittal,Strong involvement of the plant management is required in order to make sure that progress is in place.,Yes,Yes,Yes,Yes,Required all suppliers,Next submittal,Volvo Car,Yes,Yes,Yes,Yes,Annually. This is a requirement for Q1,Next submittal,Volvo Group,Europe, a few suppliers in the Middle East,Yes,Yes, Brazil,India, China,Annually self-audit submission and follow-up to be implemented,Next Submittal,20,21,OEM,Supplier Audit Policy,Supplier evaluations are completed by Chrysler personnel using the Supply Process Analysis (SPA) for new suppliers, new supplier locations, and problem suppliers. The SPA encompasses elements inclusive of the MMOG self-assessment. Additional audits will be conducted on suppliers that have a significant variance in the self-assessment ranking and their actual Chrysler Supply performance rating.,North America and Europe only. Potential suppliers, new suppliers, and problem suppliers. All suppliers will eventually get an audit. Major and problem suppliers will be prioritized.,Suppliers are consulted on the Global MMOG/LE in the Project Phase. Annual audits are not required annually, only during the project phase. In the Trial phase, evaluations are carried out if there are problems with the supplier.,New and problem suppliers,Volvo Car,An attempt is made to visit all new suppliers and big volume suppliers. For potential suppliers self-assessment is the first step.,Volvo Group,Potential suppliers, new suppliers, and problem suppliers,21,22,OEM Focus During MMOG/LE Audits,Strategy and Improvement,Management commitment,Capacity and Production Planning,Supplier Interface (Tier 2),Performance measurement,Sub-tier supplier communication,Sub-tier suppliers in emerging markets,Improvement Plan,Self-Assessment Quality,23,Key MMOG/LE Criteria,24,MMOG/LE Processes,24,25,26,Key Criteria,Materials Management Objectives,Analyzed, measured (action plans if necessary),Defined, documented, communicated and understood,Identify continuous improvement opportunities,Corrective action for bottleneck processes,Job descriptions, work instructions and training plans,27,Key Criteria,Key Performance Metrics,Delivery Performance,Supplier Performance,Internal performance (plan versus actual),KPIs for MMOG/LE*,ASN Message,KPI4GMML 1,ASN Performance,KPI4GMML 5,Production Disruption,Schedule Modifications,Incomplete units,Line Stops,KPI4GMML 4,Material Handling & Identification,or,KPI4GMML 2,Delivery Accuracy,or,KPI4GMML 6,Supplier Communication & Cooperation,Criteria :,Self-sufficiency, Reliability, Responsiveness Supplier problem notification, Availability, Flexibility,Delivery Requirements,Supplier,Plant,Customer Plant,Warehouse,Assembly Line,DOCK,DOCK,KPI4GMML 3,“VMI”,*Key Performance Indicators for Global Materials Management and Logistics,28,29,Key Criteria,Resource Planning,Flexibility and availability are optimized,Contingency plans and emergency procedures exist,Employees are trained,Capacity Planning,Long, medium, short-term plans reviewed regularly,Process in place to notify of shortages,Support,all,requirements for,all,customers,Minimize inventory,Obsolescence,Raw material,WIP,Finished goods,30,Key Criteria,Communication,Scheduling automatically integrated into system without manual intervention,830/DELFOR/Planning Releases,862/DELJIT/Shipping Releases,System compares resources versus requirements,Process in place to notify of resource limitations,Material Identification,Segregate good/bad material,Packaging and bar code labeling,31,Key Criteria,Production and Product Control,Process to monitor inventory levels,Safety stock, minimum stock, etc.,Count Accuracy,Product structure accuracy,Control and handling of WIP, scrap, rejects, returns,Traceability,32,Key Criteria,Engineering Change Control,Participate and formal sign off,New parts/past models/inactive parts,Shipping,Timing, contents and accuracy of shipping labels,Labels match customer requirements,Data content of ASN is 100% accurate,Controls in place to prevent shipping discrepancies,Customs clearing process (if applicable),33,Key Criteria,Supplier Communication,Process to ensure sub-tier suppliers can support production on-time with the right quantities,Electronic communication (EDI or Internet),Releases, schedules and ASNs,Planning horizon is appropriate,In-transit visibility from ASNs,Customs clearing process (if applicable),Process for suppliers to notify of shortages,34,Key Criteria,Supplier Packaging,Bar code labels,Process in place to define packaging and pack size,Ensure sufficient packaging material is available,35,Key Criteria,Supplier Assessment,Methodology to select,and,evaluate suppliers,Continuous improvement process for sub-suppliers,Supplier performance metrics,36,AIAG/Odette Benefits Survey,36,AIAG and Odette MMOG/LE Survey,Survey administered in March/April 2007,Over 160+ survey respondents,North America,Europe,China,Respondent demographics,Tier 1, Tier 2, Tier 3 and Aftermarket,Large, Midsize and Small Companies,Implementation time was from 1 to 3+ years,Management commitment was not measured,37,Top Five Performance Improvements: Tier 1 and Tier 2-3,Ability to meet ISO TS-16949,Ability to keep existing business,Data accuracy,Ability to support lean (Tier 1),Overall supplier rating (Tier 2-3),Inventory Control,Regardless of Tier:,38,Top Five Performance Improvements: Large, Midsize and Small Companies,Data accuracy,Ability to meet ISO TS-16949,Ability to keep existing business,Large suppliers also indicated,Delivery accuracy and inventory control,Midsize suppliers also indicated,Supports lean implementation and new business,Small suppliers also indicated,Overall supplier rating and new business,Regardless of Size:,39,Top Five Performance Improvements: by Time Implemented,Data accuracy,Ability to meet ISO TS-16949,Ability to keep existing business,Also indicated:, 1year: Ability to support lean and inventory control,1-2 years: Inventory control,2-3 years: Delivery accuracy and line shortages,3+ years: Reduced manual entry and inventory control,Regardless of Time Implemented:,40,Data Accuracy,Positive,Performance Improvement Mean Score Over Time,58,60,62,64,66,68,70,80,15% improvement in past 10 years,85% of suppliers are at MMOG/LE Level “A”,45,Benefits of Using MMOG/LE China Tier 1 Suppliers Opinions,Reduction in raw material, work-in-process and finished inventory,More efficient process from receiving raw material to shipping inventory,Visible signs on shop floor identifying manufacturing operations,Use of metrics to capture failure in process,Importance of appropriate packaging,More organized warehouse: FIFO process used more effectively,More control and accountability in the material ordering process,More warehouse space,Ease of production planning and scheduling process,Less errors,Ability to compare material received versus material shipped,Ability to see ASNs from tier 1s and pay tier 1s electronically,Improved communications within the supply chain,46,47,Delivery Score Improvements,602 suppliers completed MMOG/LE 2006-2007,54% improved in Chrysler delivery rating,Average improvement to Chrysler rating = 30%,36% improved MMOG/LE score,85% are at “A” level,48,MMOG/LE, Volvo Group, update Sept 07,All new suppliers are requested to submit the document,A Requirement for existing major and poor performing suppliers,A Criteria of Volvo Group Key Elements Procedures, Logistics, 850 assessments received, 230 verified with Volvo internal personnel (most often on location),Linked to supplier relationship development process,Example N-America,: Self-assessed 44% of suppliers on A-level,After verification 37% of suppliers on A-level,Example S-America,: Adherence to supply instructions (Mar to Aug),Total local suppliers average 89.0% correct day/quantity,Total self-assessed suppliers 86.7%,All verified level A-suppliers 96.7%,All verified level C-suppliers 85.8%,not included: Volvo Car Corporation,48,MMOG/LE Benefits and Success Stories from Suppliers,49,JCC Company Background,Company size $50 million USD,Supplier in Fuzhou, China,Parts produced,Aluminum alloy pistons,Motor air compressors,Diesel engines,Outboard engines,OEM and aftermarket supplier,50,Results,Reduced raw material and finished goods inventory by 50%,Ability to achieve 100 points for monthly delivery rating,Decreased premium freight,Improved overall rating by 20%,Obtained a competitive advantage,Obtained new customers,Enterprise visibility into customer requirements drives business,Gained efficiencies in productivity, quality and delivery,51,Products include pulleys, dampers and idlers,Approximately $55 million in sales,Supplies to OEMs and major Tier 1s,Major customers include:,Ford,General Motors,Nissan,Automotive Component Holdings (Visteon),London, Ontario Operations Background,52,Physical Inventory,Reduced frequency from monthly to annually,Inventory Value,Reduced 50% in past years,Delivery Performance,On time shipping performance to customers in 2006 was 99.7%,Delivery ratings to customers providing feedback was 100,Supplier Performance,On time delivery from suppliers is 100% on date required,97% of material requirements are communicated electronically to suppliers,95% of incoming material shipments are transmitted via ASNs,London, Ontario Operations Results,53,54,Global MMOG/LE Projects,North America,TRW Freudenberg Akebono Plastech Gates - Schefnacker Georg Fischer General Bearing Wagon Automotive Lear Schefenacker,Europe,ArvinMeritor - Tower Automotive -,SNOP - recia - Mecaplast - MGI Coutier - Magneti Marelli - Treves Robert Bosch - Rieter Automotive - Hutchinson SIEMENS VDO Automotive Behr France Metaldyne International France TRW France - Edscha France Beru Eyquem SAS Amis (Sifcor) APM Autoliv France Continental Cooper Standard Dunlop roues Electrofil Fabri Freudenberg GKN Driveline Gris Dcoupage - Mahle Mann Hummel Alps Fuji Koyo ,China,Changhua Chaoli Jiaxuan JCC Xiyuan Zhongyi Zongshen,South America,Mueller,54,Supporting Training and Documents Available,55,Harmonized Global Training,1-Day,standardized global AIAG/Odette training,Training Slides &Instructor Manual,ParticipantManual,ImplementationToolkit,Odette/AIAG,MMOG/LE,Work Group,56,MMOG/LE Course Objectives,Continuous Improvement Tool,What is the MMOG/LE?,Assessment,Gap Analysis,Implementation,MMOG/LE,57,58,58,MMOG/LE Training and Seminars World Wide,Americas,Europe,Others,177,people,130,people,180,people,50,people,480,people,160,people,700,people,200,people,100,people,6,people,4,people,55,people,25,people,15,people,13,people,United States of America,Canada,Mexico,Brazil,United Kingdom,Sweden,Germany,France,Spain,Czech Republic,Slovac Republic,Romania,Poland,Russian Federation,China,Iran,*,India (training Fall 2007),Additional Seminars held:,Japan,Taiwan,Hong Kong,Thailand,15,people,Turkey,58,59,Related Guidelines and Best Practices,M-7: Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE),M-8: Key Performance Indicators for Global Materials Management and Logistics (KPI4GMML),Trading Partner Agreement for Global Materials Management and Logistics (,available March 2008,),E-17: Joint Automotive Industry Forum China B2B Recommendation,EDI/XML Project Planner,Global Evaluation for Carriers and Logistics Service Providers,Available at or,59,60,MMOG/LE Seminars held Globally,Americas,US Mexico Brazil,Asia,Japan Taiwan China - Hong Kong Thailand India,Central and Eastern Europe,Poland - Czech Republic Slovakia Turkey Russia Romania,Europe,France UK - Spain,60,