No Supplier Left Behind March 6, 2008
Posted by Meg Suggs in EDI.Tags: automotive industry, lean manufacturing, MMOG/LE
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I read an interesting article today on how the automotive industry is developing best practices to combat rising oil prices, a struggling economy and global competition.
One of the ways U.S. car makers are keeping their heads above water is by leveling the playing field with all of their suppliers via a program called Materials Management Operations Guidelines and Logistics Evaluation (MMOG/LE). These guidelines were created in April of 2004 and serve as a “single set of global guidelines for materials management.” Members of the automotive industry are using MMOG/LE now more than ever to identify performance gaps, reach goals, and make sure all parties involved are meeting all of the requirements. Believe it or not, there are still many suppliers who have yet to adopt EDI or even bar coding.
Having some suppliers that meet global guidelines and others that don’t can seriously prohibit the use of lean manufacturing—a tactic that can REALLY help car makers in this time of crisis.
What other suggestions would you make to auto makers in regards to their supply chains to improve business and overcome these hard times for their industry?
While it may not have been “e-commerce” or “EDI” driven, Chrysler had worked some “magic” with many of their suppliers in the late 80s with a few car lines, working with suppliers to cut costs and improve lead times and all that to bring out a “trim” level of some of their “older” car lines….
The Dodge Omni and Plymouth Horizon - twin, small 4 door hatchbacks - and the Dodge Aries and Plymouth Reliant - twin, mid-sized 2 and 4 door sedans and a wagon - were built to the “America” label - offering a fixed price with certain levels of equipment and limited options.
In both cases, the cars had been in production for many years (over a decade for the Omni and Horizon) with limited changes. Chrysler was able to work with their suppliers to cut costs and cut inventory of unused parts - maybe one of the first, major instances of JIT (just in time) manufacturing.
Through their programs, they were able to cut costs on manufacturing those cars, offering them at a lower price to the dealers, who, in turn, were able to offer them at lower prices to the customers…. I don’t remember if the sales of those models increased because of the “America” program, but it probably worked very well, as they kept the “America” program and models around for a few years.
But this was also well before the adoption of MMOG/LE…..
In any industry - whether an automaker or a dressmaker, retailer or wholesaler - suppliers and buyers need to work together - as PARTNERS - to improve their performances in ways that will affect and assist both PARTNERS - by allowing more information to flow and be used on both sides of the equation.
I couldn’t agree with you more, Craig! Great comment.
[...] take that collaboration thought to another level. Over on that Inovis blog, they also posted about No Supplier Left Behind and how something called MMOG/LE (read their blog!) is being used in the Automotive Industry to try [...]