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Materials Management Operations Guideline/Logistics Evaluation January 2008 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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Materials Management Operations Guideline/Logistics Evaluation

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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


High Schools

Other non-automotive industries








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


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 or




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

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
KPI’s for MMOG/LE*


Production Disruption

Schedule Modifications

Incomplete units

Line Stops


Supplier Communication & Cooperation

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


Material Handling & Identification


Delivery Requirements

ASN Message

Customer Plant






Assembly Line



Delivery Accuracy




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


Raw material


Finished goods

key criteria30
Key Criteria


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


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 to define packaging and pack size
    • Ensure sufficient packaging material is available
key criteria35
Key Criteria
  • Supplier Assessment
    • Methodology to select and evaluate suppliers
    • Continuous improvement process for sub-suppliers
    • Supplier performance metrics
aiag and odette mmog le survey
AIAG and Odette MMOG/LE Survey

Survey administered in March/April 2007

Over 160+ survey respondents

North America



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
Data Accuracy Positive Performance Improvement Mean Score Over Time








<1 Year

1-2 Years

2-3 Years

3+ Years

  • 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

renault and mmog le global benefits
Renault and MMOG/LEGlobal 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 %

ford and mmog le delivery rating improvements
Ford and MMOG/LE Delivery Rating Improvements
  • 1641 suppliers in North America completed MMOG/LE
  • As of December 31st, 2007:
    • 90% of suppliers reporting MMOG/LE Level “A”
    • 90% of suppliers have a delivery rating > 80
    • 15% delivery improvement in the past 10 years
ford and mmog le benefits
Ford and MMOG/LEBenefits
  • Improved Ford Delivery Ratings
    • ASN data accurate and timely
    • Up-to-schedule shipments
    • Correct packaging and labeling
    • Premium instances reduced
  • Improved communication with the Ford customer locations
  • Fewer Ford plant shut downs due to materials management issues

All of which lead to increased customer satisfaction!

ford and mmog le benefits47
Ford and MMOG/LEBenefits

Feedback and observations from supplier onsite audits

  • Cost reductions; specifically inventory carrying cost of raw material, WIP, and finished goods
  • Optimization of inventory safety stock levels
  • Improvement in floor space utilization
  • Adherence to FIFO practices
  • Accurate labeling of material
  • Efficiencies in shipping and receiving areas with established window times
  • Accurate part tracking
  • Correct shipment being loaded on the truck
  • Better understanding of material management system
  • Visual organization – Plan For Every Part
ford and mmog le china tier 1 supplier s opinions
Ford and 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
  • 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
  • Less errors in delivery rating
chrysler and mmog le delivery score improvements
Chrysler and MMOG/LEDelivery Score Improvements
  • 600+ suppliers completed MMOG/LE in 2006/2007
  • 54% improved in Chrysler delivery rating
  • Average improvement in Chrysler rating = 30%
  • 36% improved MMOG/LE score
  • 85% are at “A” Level
chrysler and mmog le mmog benefits
For Chrysler

Improved Delivery Ratings in multiple categories:

Shipment data is improved

Maintained deliveries to schedule

Reduction in expedited freight

Improved plant up-time

Improved communication with plants

Provides measurable, objective data for supplier improvement

For Suppliers

Supports LEAN principles

Reduction in material, inventory, safety stock

Improved communications with customers

Reduced downtime incidents

Improved quality and efficiency of window time conformance

Provides measurable, objective data for supplier improvement

Chrysler and MMOG/LEMMOG Benefits
volvo group and mmog le benefits
Volvo Group and MMOG/LEBenefits

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

  • 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
jcc and mmog le benefits
JCC and MMOG/LEBenefits
  • 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
gates london operations
GATES – London Operations
  • Products manufactured include pulleys, dampers and idlers.
  • Approx $55 million in sales (medium size)
  • Supplies to both OEMs and major Tier 1’s
    • Ford, General Motors, Nissan, Automotive Component Holdings (Visteon)
gates and mmog le benefits
GATES and MMOG/LEBenefits


  • On time shipping performance to customers in 2007 was 99%
  • Delivery ratings to customers providing feedback is 100


  • 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
gates and mmog le benefits57
GATES and MMOG/LEBenefits


  • As accuracy improved went 12 to 1 a year
    • Estimated cost for a physical inventory is $15-20K (overtime wages, equipment rental, inventory tags, etc.)


  • Reduction of approx. 50% since 2001
    • Since 2001 sales have increased by 20%


  • Premium freight on inbound/outbound material has gone from $180K in 2002 less than $25k last year
harmonized global training
Harmonized Global Training

1-Day standardized global AIAG/Odette training

Training Slides &Instructor Manual




Work Group


mmog le course objectives
MMOG/LE Course Objectives

Continuous Improvement Tool

What is the MMOG/LE?


Gap Analysis



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




55 people

23 people

177 people

United Kingdom

Czech Republic


United States of America

700 people

180 people

6 people

4 people



Slovac Republic



130 people

50 people

15 people




200 people

  • India (2008)
  • Additional Seminars held:
    • Japan
    • Taiwan
    • Hong Kong
    • Thailand


640 people

25 people



100 people

160 people

13 people



Russian Federation

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 or

mmog le seminars held globally
MMOG/LE Seminars held Globally


US – Mexico – Brazil


Japan – Taiwan – China - Hong Kong – Thailand – India

Central and Eastern Europe

Poland - Czech Republic – Slovakia – Turkey – Russia – Romania


France – UK - Spain

example of bulleted list
Example of Bulleted List
  • Automotive Industry Action Group
    • Not-for-profit Association
      • Not against it, either
  • Everyone wins
      • Money
        • Money
        • More Money