Coordination of supply chains
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Coordination of Supply Chains. Understanding Supply Chain Relationships. Agenda. North American Automotive Industry Automotive Industry Action Group Chrysler Corporation Supply Chain initiatives U of M Study Opportunities Areas for dialog Future research directions High impact areas .

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Coordination of Supply Chains

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Coordination of supply chains

Coordination of Supply Chains

Understanding Supply Chain Relationships


Agenda

Agenda

  • North American Automotive Industry

  • Automotive Industry Action Group

  • Chrysler Corporation

    • Supply Chain initiatives

  • U of M Study

  • Opportunities

    • Areas for dialog

    • Future research directions

    • High impact areas


Combined north american automotive market share

Combined North American Automotive Market Share

Chrysler, Ford, General Motors

Automotive Mergers

European Competition

  • Improved Quality

  • Lower Costs

Oil Shocks

Asian Competition


The auto industry

The Auto Industry

  • Worldwide market is 48 million vehicles

  • 5,500 vehicles built every hour of everyday

  • Potential for 60 million vehicles by 2001

  • 630 plants in 63 countries producing vehicles

  • 12 million units, over capacity


A typical seating supply chain

Excel/Atwood

Douglas &

Lomason

Collins & Aikman

Specialty Screw

Textileather

Canadian Fab

A Typical Seating Supply Chain

General

Motors

Chrysler

Ford

Johnson Controls

Hardware Suppliers

Soft Trim Suppliers

Lear Favesa

R. R. Spring

Rockford Spring

Dudek &

Bock Spring

Milliken &

Company

Technotrim


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Automotive Industry Action Group


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Automotive Industry

Action Group

  • Automotive trade association - nearly 1400 member companies

  • Association formed in 1982

  • Forum to address automotive industry issues

  • Focus on improving productivity

  • Educate and inform


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Member Company Diversity

Software Vendors

Computer Hardware Vendors

Communication Vendors

Training Vendors

Registrar Suppliers

Construction Companies

Packaging Companies

Aftermarket Suppliers

GM, Ford, Chrysler

Heavy Truck Manufacturers

European Transplant OEMs

Japanese Transplant OEM’s

Financial Institutions

Transportation Suppliers

Production Part Suppliers

Non-Production Part Suppliers


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AIAG Major Initiatives

  • QS-9000 SUB-TIER DEPLOYMENT

  • AUTOSTEP

  • EDI ROLLOUT

  • AUTOMOTIVE NETWORK EXCHANGE (ANX)

  • YEAR 2000


Legacy proprietary one to one connectivity

Legacy: Proprietary, One-To-One Connectivity

Chrysler

Ford

GM

Chrysler

Telecom

Network

Ford

Telecom

Network

GM

Telecom

Network

Supplier

Supplier

Supplier


Anx open any to any connectivity

ANX: “Open”, Any-To-Any Connectivity

Chrysler

Ford

GM

Chrysler

Telecom

Network

Ford

Telecom

Network

GM

Telecom

Network

ANX

Supplier

Supplier

Supplier


The year 2000 challenge

The Year 2000 Challenge!


Program history

Program History

  • Chrysler, Ford, and GM initiated this effort through the AIAG to provide:

    • common process to suppliers

    • independence / confidentially to manufacturers and suppliers

    • neutral facilities & support services

    • USA regulatory approval


2 0 develop tools

0.0

1.0

2.0

3.0

4.0

8.0

5.0

6.0

7.0

8.0

2.0 Develop Tools

  • Awareness Seminar

  • Self-Assessment

  • Web-based Tool Kit

    • Tips and Techniques

    • Plant-Floor-Equipment Knowledge Database

  • Evaluation Methodology

  • Assessor Training

  • Information Center


Company background chrysler

Company Background: Chrysler

  • Manufacture of Cars and Trucks

  • 126,000 employees worldwide

  • 42 Assembly and Manufacturing locations

  • 3.1 million units sold in 1997

  • 1996 Forbes ‘Company of the Year’

  • Close the books forever, November 1998


Cost in the average new vehicle

Cost in the Average New Vehicle?

70%

Supply Chain

30%

Chrysler


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What it is

The Extended Enterprise™

A Chrysler-coordinated, goal-driven process that unifies and extends the business relationships of suppliers and supplier tiers to reduce cycle time, minimize systems cost and achieve perfect quality.


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The Extended Enterprise Supply Chain

Subassembly

Supplier

Assembly

Plant

Delighted

Customer

Raw Material

Supplier

Component

Supplier

Dealer

Maximized value at minimized cost


Enablers of the extended enterprise

Quality

Cost

Cycle-Time

Technology

Enablers of the Extended Enterprise

Supplier Relations

Supply Concept

Commodity Strategies

Supplier Development

Supplier Development

Cost Management

Technology Leverage


Partner information network tools

Partner Information Network Tools

  • Computer Aided Design (CAD/CAM)

  • Electronic Data Interchange ( EDI )

  • Supplier Partner Information Network ( SPIN )

  • Electronic Funds Transfer ( EFT )

  • Electronic Mail ( E-MAIL )


Electronic commerce roadmaps

Electronic Commerce Roadmaps


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ANX

ANX

ANX

Tier 2

Tier 3

Tier 1

Chrysler

EDI

830, 856, 862/866

EDI

Transactions

EDI

Transactions

TM

Empowering the Extended Enterprise

With Continuous Improvement

Supply Chain Order-entry Process Empowerment

$. C. O. P. E.


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Extended Enterprise In Action:

Dealerships

Working together towards

process improvement

Communication Flow

(Supply Chain EDI)

Chrysler

Great Cars & Trucks

(Tier 1)

Dana

Corp.

Axles

(Tier 2)

Impact

Forge

Forgings

Material Flow

(On-Time Delivery)

(Tier 3)

Mac Steel

Northstar Steel

Steel

Best practice suppliers,

who are leading the

Supply-Chain EDI Initiative

Supply Chain Example


Chrysler communications

Chrysler Communications

  • Verbal

    • meetings, townhalls, awards

  • Written

    • Supplier Newsletter, PASS report

  • Video

    • Chrysler Employee Network feed

  • Electronic

    • Electronic Commerce


Understanding supply chain relationships

Understanding Supply Chain Relationships

  • Open business relationships

  • Communications builds trust

  • Establish partnerships

  • Empower

  • Reward


Trust of the oem

Trust of the OEM

Very

Great

Extent

Very

Little

Extent


Communication with oem

Communication with OEM

Very

Great

Extent

Very

Little

Extent


Extent oem shares savings

Extent OEM Shares Savings

Very

Great

Extent

Very

Little

Extent


Willingness to share new technology

Willingness to Share New Technology

Very

Great

Extent

Very

Little

Extent


Good overall relationship

Good Overall Relationship

Very

Great

Extent

Very

Little

Extent


Activity in supply chain management

Activity in Supply Chain Management

Very

Great

Extent

Very

Little

Extent


Greatest long term benefits of extended enterprise

Greatest Long Term Benefits of Extended Enterprise™

Percent Selecting This Item Most Important

Improved

Communications/

Coordination

Lower Total

System Costs

Improved Margins

Improved

Quality

Reduced

Cycle

Time

Better Human

Resource

Utilization


Areas for dialog

Areas for Dialog

  • Track and document ‘Role Model’

  • Methods for collaboration

  • How to measure success

  • Obtaining trust of user and accuracy of information


Future research

Future Research

  • Where are the opportunities?

  • What are the cultural affects?

  • How can technology help?

  • Develop a ‘Step-by-Step’ Roadmap

  • What can the U.S. Government and Universities offer business?


High impact areas

High Impact Areas

  • Examples of

    • benefits

    • costs

    • opportunities

  • IT infrastructure as all levels of Supply-chain

  • Open communications up and down the chain


John kay

John Kay

Phone: +248-512-1438

E-mail: [email protected]


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