CASE STUDY 2: Purchasing and Logistics Cockpit

Create program to check all Purchasing and Logistics-related data requirements for large auto manufacturing plant. “Visual management”-compatible program required to easily evaluate the readiness status of all material for line-side adoption.

Initial Situation:

ERP system used by Purchasing and Logistics Department has numerous standard tools for use by responsible specialists to create, edit, view and monitor data related to the procurement and use of material for vehicle production. Each tool, however, only displays one small part of the information necessary to determine a material’s readiness for use in the vehicle.

Challenges and Goals:

1- Consolidate information from all ERP tools in one screen.
2- Provide easy “drill-down” capability to create any missing information.
3- Provide easy “drill-down” capability to edit existing data.
4- Automatically highlight missing data leading to production problems.
5- Automatically distribute responsibilities to each Purchasing
and Logistics specialist.

Approach:

1- Define complete data package before factory use of material
(from Purchasing and Logistics viewpoint).
2- Create a list of ERP system tools in use by the responsible specialists.
3- Form working group (composed of at least two “super-users” and consultant).
4- Layout the system using “Condition” diagrams.
5- Propose screen layouts containing each of the “procedure” boxes identified
in the condition diagram.
6- After agreement on output layout, program the application.
7- Document and train.

Benefits:

1- Increased user-friendliness of the system.
2- Improved specialist efficiency.
3- Improved monitoring.
4- Built in logic can detect potential problems before they impact production.

Considering that the average engineering change costs $50000 to implement and can affect hundreds or thousands of products, being able to detect production mistakes can save a company hundreds of thousands of dollars.

CASE STUDY 1 Prevention of Engineering Change Errors

Prevention of Engineering Change Errors :

A system to support efficient management decision making and project direction, and collects and summarizes all the related information was needed. Such system’s scope is the prevention of potential build problems by analyzing early BOM Data in relation to Vehicle Order data.

Corporate directives required the use of standard methods and systems whenever possible. One case in which the corporate system supports the automaker well, is in the Engineering Change Control process, specifically the “Bill of Materials” system and auxiliary utilities that produce reports that identify potential problems when adopting changes and their impact to the BOM explosion for parts ordering in the near and not so near future .

Initial Situation:

Daily report contains all the engineering changes that needed to be analyzed against the BOM explosion data to support correct parts ordering. Report ranged up to 3000 pages of information checked manually by the specialists.

Errors detected by the specialists listed/ presented to management for approval. Approved changes made manually to BOM information in corporate system via the regular user interface.

Challenges and Goals:

1- Eliminate paper report.
2- Distribute Engineering Changes automatically to the responsible specialists.
3- Automate cross-checking of BOM data with orders data to highlight potential problems.
4- Provide a user-friendly interface to allow users to monitor their responsibilities.
5- Provide reliable management monitoring of engineering changes processes.
6- Provide long term storage of daily BOM data.
7- Provide automatic notification to specialists/management if data not checked.

Approach:

Capture soft copy of daily printed report.
Create parser program to extract relevant data in structured format and store information in a set of database tables.
Write post-processor program to automatically distribute work to specialists three times daily.
Create user-friendly application to facilitate corrections to the BOM data and “close” any open Engineering Changes.

Benefits:

1-Cost reduction in the form of paper savings, cabinet storage and long term data retention off-site. One customer’s saving amounted to 0.5 hours per engineer, per day. The company employed 20 engineers at the time of this project.
2-Improved accuracy of data modifications.
3-Improved monitoring to capture all Engineering Change and guarantee on-time processing to prevent costly problems downstream.

Continuous Improvement