Coordination of Supply Chains

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Coordination of Supply Chains

• Understanding Supply Chain Relationships

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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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Combined North American Automotive Market Share
Chrysler, Ford, General Motors
Automotive Mergers
European Competition

• Improved Quality
• Lower Costs

Oil Shocks
Asian Competition
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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

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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 Europ
ean Transplant OEMs Japanese Transplant
OEMs 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

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Legacy Proprietary, One-To-One Connectivity
Chrysler
Ford
GM
Chrysler Telecom Network
Ford Telecom Network
GM Telecom Network
Supplier
Supplier
Supplier
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ANX Open, Any-To-Any Connectivity
Chrysler
Ford
GM
Chrysler Telecom Network
Ford Telecom Network
GM Telecom Network
ANX
Supplier
Supplier
Supplier
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The Year 2000 Challenge!
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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

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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

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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

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Cost in the Average New Vehicle?
30 Chrysler
70 Supply Chain
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• The Extended Enterprise

What it is
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
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Enablers of the Extended Enterprise
Supplier Relations
Supply Concept
Commodity Strategies
Supplier Development
Supplier Development
Cost Management
Technology Leverage
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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 )

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Electronic Commerce Roadmaps
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• . C. O. P. E.

Supply Chain Order-entry Process Empowerment
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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
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Chrysler Communications

• Verbal
• meetings, townhalls, awards
• Written
• Supplier Newsletter, PASS report
• Video
• Chrysler Employee Network feed
• Electronic
• Electronic Commerce

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Understanding Supply Chain Relationships

• Open business relationships
• Communications builds trust
• Establish partnerships
• Empower
• Reward

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Trust of the OEM
Very Great Extent
Very Little Extent
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Communication with OEM
Very Great Extent
Very Little Extent
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Extent OEM Shares Savings
Very Great Extent
Very Little Extent
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Willingness to Share New Technology
Very Great Extent
Very Little Extent
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Good Overall Relationship
Very Great Extent
Very Little Extent
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Activity in Supply Chain Management
Very Great Extent
Very Little Extent
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Greatest Long Term Benefits of Extended
Enterprise
Percent Selecting This Item Most Important
Improved Communications/ Coordination
Lower Total System Costs Improved Margins
Better Human Resource Utilization
Reduced Cycle Time
Improved Quality
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Areas for Dialog

• Track and document Role Model
• Methods for collaboration
• How to measure success
• Obtaining trust of user and accuracy of
  information

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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?

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High Impact Areas

• Examples of
• benefits
• costs
• opportunities
• IT infrastructure as all levels of Supply-chain
• Open communications up and down the chain

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John Kay
Phone [phone] E-mail
jvk_at_chrysler.com
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