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Materials Management Operations Guideline/Logistics Evaluation November 2007 MMOG/LE 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

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Presentation Transcript
agenda
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

improving supply chain delivery performance
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

who is implementing mmog le
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
MMOG/LE Outside the Automotive Industry
  • Universities
  • High Schools
  • Other non-automotive industries
    • Hospitals
    • Construction
    • Aerospace
    • Chemistry
    • Electronics
    • Industrial
    • Retail
principles of global mmog le
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
mmog le self evaluation categories
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
MMOG/LE Translations

Available in 10 languages including:

English French German

Spanish Portuguese Chinese

Romanian Czech Russian

Over 2000 trained users in 16 different countries

what does this mean to me
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

download the self assessment
Download the Self Assessment

odette.org or aiag.org

ENGLISH

FRENCH

CHINESE

complete the form each question is yes x or no blank
Complete the FormEach Question is Yes (“X”) or No (Blank)

Populates the gap analysis tab

15

oem focus during mmog le audits
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

key criteria
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
key criteria27
Key Criteria

Key Performance Metrics

  • Delivery Performance
  • Supplier Performance
  • Internal performance (plan versus actual)
kpi s for mmog le

KPI4GMML 5

Production Disruption

Schedule Modifications

Incomplete units

Line Stops

KPI4GMML 6

Supplier Communication & Cooperation

Criteria : Self-sufficiency, Reliability, Responsiveness Supplier problem notification, Availability, Flexibility

KPI4GMML 4

Material Handling & Identification

or

Delivery Requirements

ASN Message

Customer Plant

DOCK

DOCK

Warehouse

Supplier

Plant

Assembly Line

or

KPI4GMML 2

Delivery Accuracy

KPI4GMML 3

“VMI”

KPI’s for MMOG/LE*

KPI4GMML 1

ASN Performance

*Key Performance Indicators for Global Materials Management and Logistics

key criteria29
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
key criteria30
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
key criteria31
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
key criteria32
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)
key criteria33
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
key criteria34
Key Criteria
  • Supplier Packaging
    • Bar code labels
    • Process in place to define packaging and pack size
    • Ensure sufficient packaging material is available
key criteria35

Supplier Assessment

    • Methodology to select and evaluate suppliers
    • Continuous improvement process for sub-suppliers
    • Supplier performance metrics
Key Criteria
aiag and odette mmog le survey
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

top five performance improvements tier 1 and tier 2 3
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:

top five performance improvements large midsize and small companies
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:

top five performance improvements by time implemented
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:

data accuracy positive performance improvement mean score over time

70

68

66

64

62

60

58

<1 Year

1-2 Years

2-3 Years

3+ Years

Data Accuracy Positive Performance Improvement Mean Score Over Time

Notes:

  • On a 100 point scale
  • Over 60 is considered a strong positive response
general findings
General Findings

Meeting customer requirements and data accuracy are consistent benefits regardless of time, size or tier

MMOG/LE usage continues to improve year after year

MMOG/LE is an investment in first year of implementation

Continuous improvement is a journey, not a destination

Minimal differences between N.A. and Europe

Performance improvements were consistent

global mmog le benefits
Global MMOG/LE Benefits

Renault requires the use of Global MMOG/LE in project phase (vehicles or engines)

In July 2007 for the “Twingo” program:

For 28 suppliers using Global MMOG/LE

Service Rate = 91 %

For the others :

Service Rate = 80 %

44

delivery rating improvements
Delivery Rating Improvements

1641 suppliers in N.A. completed MMOG/LE 2006/2007

As of October 2007, 93% are >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 supplier s opinions
Benefits of Using MMOG/LE China Tier 1 Supplier’s 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 ASN’s from tier 1’s and pay tier 1’s electronically
  • Improved communications within the supply chain
delivery score improvements
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
mmog le volvo group update sept 07
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

jcc company background
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
results
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
slide52

London, Ontario Operations Background

  • 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)
slide53

London, Ontario Operations Results

  • 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
global mmog le projects
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 Découpage - Mahle – Mann Hummel – Alps – Fuji Koyo …

China

Changhua – Chaoli – Jiaxuan – JCC – Xiyuan – Zhongyi – Zongshen

South America

Mueller

54

harmonized global training
Harmonized Global Training

1-Day standardized global AIAG/Odette training

Training Slides &Instructor Manual

Odette/AIAG

MMOG/LE

Work Group

ParticipantManual

ImplementationToolkit

mmog le course objectives
MMOG/LE Course Objectives

Continuous Improvement Tool

What is the MMOG/LE?

Assessment

Gap Analysis

Implementation

MMOG/LE

mmog le training and seminars world wide
MMOG/LE Training and Seminars World Wide

America’s

Europe

Others

55 people

15 people

177 people

United Kingdom

Czech Republic

China

United States of America

700 people

180 people

6 people

4 people

*

Sweden

Slovac Republic

Iran

Canada

130 people

50 people

15 people

Germany

Romania

Turkey

200 people

  • India (training Fall 2007)

Additional Seminars held:

    • Japan
    • Taiwan
    • Hong Kong
    • Thailand

Mexico

480 people

25 people

France

Poland

100 people

160 people

13 people

Brazil

Spain

Russian Federation

58

58

related guidelines and best practices
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 www.aiag.org or www.odette.org

59

mmog le seminars held globally
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