Post on 15-Jan-2016
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MMOG / LE Update
Dan HoweMay 11, 2011
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AGENDA
• MMOG/LE Organization at GM• What is MMOG/LE?• Why did GM adopt MMOG/LE?• What is GM’s MMOG/LE strategy?• What is the current status of GM’s MMOG/LE initiative?
• What resources are available to assist Suppliers with MMOG/LE and GM-specific questions?
• What feedback has GM received from Suppliers?• FAQ’s• Question and Answer
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Bob SociaVP Global
Purchasing and Supply Chain
Bill Hurles Executive
Director Global Supply Chain
Ken Cavanaugh
Director Global Supply
Chain
North American MMOG/LE Team
GM Europe
GM International Operations
GM South America
JV Partners
Executive Leadership
and Support
Processes & Systems
RegionalMMOG/LE
Teams
MMOG/LE Organization at GM
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What is MMOG/LE?
• Materials Management Operations Guidelines /Logistics Evaluation
• Supplier Self Assessment Tool • Used by both supplier and GM • Developed by OEM’s & suppliers through Automotive
Industry Action Group (AIAG) and Odette (Europe)• Comprehensive evaluation of supply chain performance and
capability• Common Format• Tool to identify & eliminate waste in the supply chain• Organized into these focus areas:Strategy & Improvement Work Organization Capacity &
Production Planning
Customer Interface Production & Product Control Supplier Interface
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MMOG/LE v. 3 Self-Assessment
Identifies gaps in standard processes / current level of performance across 6 main operational areas with ultimate goal for supplier to resolve those issues, develop contingency plans, and AVOID any impact to the OEM’s ability to build.
Focuses supplier attention on SCM impact areas inclusive of: dealing with customer volume fluctuations, capacity constraints, Tier 2 capability, resource allocation, training gaps, etc. 1 2 3 4 5 6
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Chapters / Subchapters
CHAPTER 1 - STRATEGY AND IMPROVEMENT 1.1 Vision & Strategy1.2 Objectives 1.3 Measurement, Analysis, and Action Plans 1.4 Continual Improvement 1.5 Supply Chain Development
CHAPTER 2 - WORK ORGANIZATION2.1 Organizational Processes 2.2 Organizational Procedures 2.3 Resource Planning 2.4 Work Environment & Human Resources
CHAPTER 3 – CAPACITY & PRODUCTION PLANNING
3.1 Product Realization 3.2 Capacity Planning 3.3 Production Planning 3.4 Systems Integration
CHAPTER 4 – CUSTOMER INTERFACE
4.1 Communication 4.2 Packaging & Labeling 4.3 Shipping 4.4 Transportation 4.5 Customer Satisfaction & Feedback
CHAPTER 5 – PRODUCTION & PRODUCT CONTROL
5.1 Material Identification 5.2 Inventory 5.3 Engineering Change Control 5.4 Traceability
CHAPTER 6 – SUPPLIER INTERFACE
6.1 Supplier Selection 6.2 Materials Planning & Logistics Agreement 6.3 Communication 6.4 Packaging & Labeling 6.5 Transportation 6.6 Material Receipt 6.7 Supplier Assessment
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Why Did GM Adopt MMOG/LE?
• Evolving business environment • Improve GM/Supplier relationships• “Customer of Choice”
• Defines industry expectations of Suppliers’ supply chain processes• Adopted by Ford, Chrysler, Renault, Volvo Truck, Iveco, PSA• Similar process approach as ISO/TS 16949 or QS9000
• Improve supplier performance• Throughout multiple tiers of the supply chain• Less time spent on supply disruptions• Launches, issues and non-performing suppliers as first
priorities• Move from reactive to proactive approach to anticipate
issues• Positive feedback from suppliers
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What Is GM’s MMOG/LE Strategy?
• Taking a “Helping Hand” Approach
• Emphasis on the benefits to Suppliers and to the
OEM’s
• Managing expectations between GM and Suppliers
• Building stronger relationships
• Continuously improving processes
• Enhancing industry collaboration
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Identification of Issues
and non-performa
nce
Gather Supplier Perform
ance Metrics
Apply weighte
d prioritiza
tion criteria
Align efforts with Pain
Points
•Schedule Compliance•Plant Disruptions and Downtime•Constraint / Bottleneck •Problem Suppliers Identified by Mfg Plants •Premium Freight•Containerization•Launch involvement•New Suppliers to GM•Engineering Change and Obsolescence•Communications
Risk-based Selection Strategy
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Tota
l Po
pula
tion
0% 100%
Percentage Received
Improvement Efforts
• Align improvement efforts with internal Supplier performance indicators, exposure to critical launch activities and overall risk.
• Improvement efforts include 1:1 Supplier contact, review of Supplier gap closure plans, and development of reference and training materials.
Identification of Issues
and non-performa
nce
Gather Supplier Perform
ance Metrics
Apply weighte
d prioritiza
tion criteria
Align efforts with Pain
Points
Risk-based Selection Strategy
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Benefits to Suppliers
• As a global standard for the automotive industry, MMOG/LE provides a common set of business procedures for the materials management function.
• Use of the Global MMOG/LE principles saves time and costs, while helping to ensure effective, efficient management of materials.
• Implementation of this standard may produce tremendous benefits, including up to the following: • An 85% reduction in premium freight costs.• An 80% reduction in obsolescence costs. • A 43% reduction in inventory carrying costs. • A 20% reduction in data entry time. • Gain control of processes:
• Reduce line stoppages, rework, lead times, etc.• Gain control of supply chain:
• Increase inventory visibility.• Reduce supply chain risk.
• Support continuous improvement .• Increase customer satisfaction.• Increase competitiveness.
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Benefits to OEM’s
• Operate in a Proactive vs. Reactive mode• Identifies potential process gaps and risks earlier• Drives industry-level, sustainable process
improvements• Highly capable, disciplined, and process-oriented
Suppliers• Expectations between OEM’s and Suppliers are
documented, understood and result in benchmark performance.
• Fewer disruptions• Fast, efficient and more flexible reaction to industry
and customer requirements • “Customer of Choice”
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Current Status of GM’s MMOG/LE Initiative
• mmog.le@gm.com mailbox in place for questions/submissions, access by global team
• Responses to questions and Thank You’s usually processed within 48 hrs.
• History is kept for all communications• Bulletins & FAQ’s posted in Supply Power• Utilization of ultimate Dun & Bradstreet identification number (Duns) acceptable for 2011 calendar year submission, but Manufacturing Duns is required for 2012 submission
• Desk and Site audits began in March• Planning for education and networking sessions
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Future Actions
• Compare internal performance feedback with Supplier’s self-assessment Engage Suppliers where variances exist Engage internal and/or external expertise to
assist Suppliers in strengthening their processes and performance
• Leverage Global Regional Reps to work with Suppliers in their regions
• Prioritize Supplier deep dives based on exposure to plants
• Initiate projects that focus on particular areas of interest
• Create training materials
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A B C0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ScoresA: The organization is compliant in all key criteria and can demonstrate that the materials management processes in use at the facility are best practice.
B: The organization is deficient in several areas that may impact its ability to support the needs of the customer.
C: The organization is deficient in several key criteria. An action plan should be developed immediately and implemented in a timely manner to ensure deficiencies do not result in serious or prolonged issues for the customer.
Results
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Results (continued)
F3 - A key MP&L process that is a fundamental requirement of the organization's operations. If an F3 criterion is not met, there is a high risk of interruption to the organization's and/or customer's operations and the likelihood of additional costs being incurred.
F2 - An MP&L process that has significant importance to the efficiency and effectiveness of the organization's operations. If an F2 criterion is not met, the organization’s performance and customer satisfaction may be seriously affected.
F1 - An MP&L process that demonstrates ongoing control of operational processes contributing to the organization's overall competitiveness. If an F1 criterion is not met, the organization’s long-term sustainability and competitiveness may be negatively impacted.
F3 F2 F10%
10%
20%
30%
40%
50%
60%
70%
80%
Non-con-formances by Weight
F3 35 questions, 30% of overall score F2 75 “ 43% “ F1 96 “ 27% “
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Results (Continued)
Chapt
er 1
Chapt
er 2
Chapt
er 3
Chapt
er 4
Chapt
er 5
Chapt
er 6
0%
5%
10%
15%
20%
25%
30%
Non-conformances by ChapterCHAPTER 1 - STRATEGY AND
IMPROVEMENT
CHAPTER 2 - WORK ORGANIZATION
CHAPTER 3 - CAPACITY & PRODUCTION PLANNING CHAPTER 4 - CUSTOMER INTERFACE CHAPTER 5 - PRODUCTION & PRODUCT CONTROL CHAPTER 6 - SUPPLIER INTERFACE
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Results (Continued)
Areas of non-compliance:• Problem identification, analysis and closure• Documentation of processes and workflows• Training• Integrated capacity planning• Container management• Traceability• Tier 2 management
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Help Resources
• AIAG: www.aiag.org
• Odette: www.odette.org
• GM MMOG/LE Team: mmog.le@gm.com
• QAD: Terry Onica tjo@qad.com
• LinkedIn groups
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Testimonial
“Over the years of embracing MMOG/LE our score has moved from “C” through “B” and finally “A”. We have made many improvements to our overall operation. The Assessment is a sound basis for understanding the requirements of our Customers and assuring we have in place effective procedures and work instructions that satisfy those. Integration of Purchasing and Supply Chain efforts to our Team Manufacturing and Quality efforts has provided benefits in planning, inventory control, containment and communications with tier suppliers. Our world class PPM numbers reflect the benefits of our efforts.”
- Means Industries Saginaw, Michigan
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• Posted on GM SupplyPower
FAQ's
FAQs
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A B C Scores Definition
A-Level: The organization is compliant in all key criteria and can demonstrate that the materials management processes in use at the facility are best practice. In support of continual improvement, the development of an action plan should be considered in order to eliminate any remaining unmet criteria. A-Level classification will be realized by achievement of all the following:1) Compliance to all F3 criteria2) Non-compliance to fewer than six F2 criteria3) A total score of 90% or higher
B-Level: The organization is deficient in several areas that may impact its ability to support the needs of the customer. An action plan should be developed and implemented in a timeframe that meets the needs of the business and its customer(s). B-Level classification will be realized by achievement of all the following:1) Compliance to all F3 criteria2) Non-compliance of six to 12 F2 criteria3) A total score greater than 75% and less than 90%
C-Level: The organization is deficient in several key criteria as defined below. An action plan should be developed immediately and implemented in a timely manner to ensure deficiencies do not result in serious or prolonged issues to the customer. C-Level classification will be realized from any of the following: 1) Non-compliance to any F3 criteria, 2) Non-compliance to 13 or more F2 criteria 3) A total score less than 75%
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Criteria Weighting
Scoring/Weighting Each criterion has been assigned a weighting factor defined as follows:
F3 - A key MP&L process that is a fundamental requirement of the organization's operations. If an F3 criterion is not met, there is a high risk of interruption to the organization's and/or customer's operations and the likelihood of additional costs being incurred. There are 35 F3 criteria, each scoring three points, which represents approximately 30% of the total available score.
F2 - An MP&L process that has significant importance to the efficiency and effectiveness of the organization's operations. If an F2 criterion is not met, the organization’s performance and customer satisfaction may be seriously affected. There are 75 F2 criteria, each scoring two points, which represents approximately 43% of the total available score.
F1 - An MP&L process that demonstrates ongoing control of operational processes contributing to the organization's overall competitiveness. If an F1 criterion is not met, the organization’s long-term sustainability and competitiveness may be negatively impacted. There are 96 F1 criteria, each scoring one point, which represents approximately 27% of the total available score.
Automotive: MMOG/LE from anOEM's PerspectiveTerry Onica – Director, Automotive, QAD
QAD Global Support for MMOG/LE
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The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD.
Safe Harbor Statement
QAD Global Support for MMOG/LE
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• Process maps• MMOG/LE reviews• QAD answer sheet• WWW.Qad.Com/mmogle
QAD Global Support for MMOG/LE
QAD Global Support for MMOG/LE
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Receiving Process Map Example
QAD Global Support for MMOG/LE
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• Review MMOG/LE 35 F3 and top 20 OEM criteria• Review processes, procedures and work
instructions • Presentation of findings to management
MMOG/LE Review
QAD Global Support for MMOG/LE
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QAD MMOG/LE Answer Sheet
QAD Global Support for MMOG/LE
Menuitem
OEMSpecifics
Probing ProcessMap
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Metrics Affected
QAD Global Support for MMOG/LE
Business Strategy QAD Solutions
Reduce reliance on spreadsheets
.NET UI, Browse and Reporting, BI
Reduce reliance on spreadsheets
.NET UI, Browse and Reporting, BI
Improve efficiency of customer relations
JIT, MEW, Configurator, CRM, Consignment, TMS, WMS
Process re-engineering Process Maps, Services
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• Check out WWW.Qad.Com/mmogle• Download
- MMOG/LE Products and Services brochure- MMOG/LE white paper- Automotive On-Demand and SCP brochures
• View- Short video on process maps- Testimonials - Presentations from past MMOG/LE seminars- Request QAD MMOG/LE Answer Sheet-
Next Steps
QAD Global Support for MMOG/LE
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• Dan Howe GM Dan.Howe@gm.com• Terry Onica tjo@qad.com
Questions & Answers
QAD Global Support for MMOG/LE