The six-hour car: how IT can help make it happen; Although there are certainly a number of information technology systems available, right now, the automotive supply chain is still tangled when it comes to passing information from OEMs to Tier X. Pamela Lopker thinks there's a way to straighten it out and to greatly reduce the time to go from order to delivery - IT - Digital Domain

Automotive Design & Production, Jan, 2004 by Lawrence S. Gould

AD & P: So the goal is?

Lopker: The big vision, the next step, is 100% connectivity, thereby eliminating the waste and delays in production and information flow, and helping manufacturers accurately match supply to demand. With this vision, automotive manufacturers can start looking at the different layers of connectivity and what each needs. They can create a demand-pull system based on "what is" instead of "what if."

Figure out how to connect to your top customers in a way that best supports your business processes and their business processes. Also look at how you can get orders through your enterprise as fast as possible so that your suppliers know what those orders are as fast as possible. Offer a combination of visibilities. Post your orders and production schedules on an Internet site. Allow your suppliers to download this information, using EDI, XML, batch files, or whatever, so your suppliers can have that information immediately. Then you and they can start integrating that information into their production systems.

AD & P: What technologies will make this happen?

Lopker: I belong to a group I call "supply chain execution" as opposed to "supply chain planning." We provide a set of applications: EDI, production visibility, consignment and vendor managed inventory (VMI), and replenishment logic. Visibility software provides customers and suppliers with self-service capability over the Internet so they can see their orders, see your inventory, and see the invoices. This helps in implementing kanban internally and helps supply chain partners see the consumption of inventory, shipments, and on-order inventory against actual production.

Consignment inventory and VMI are important for smoothing out the flow of the supply chain, especially as more suppliers move and store inventory to their customers' sites. This coupled with production visibility will enable suppliers to determine if they want to ship daily, hourly, every three days, and so on, and how much inventory they want to keep in the buffer or at their supplier's or customer's site. Replenishment logic helps remove delays by automatically monitoring the pull in the supply chain and determining how much should be manufactured and how much should be shipped automatically.

AD & P: Is any of this controversial?

Lopker: It has been. Certain [ERP and SCM software suppliers] and trading exchanges say that all orders come into and out from them. I say, "Bull. Nobody is going to buy into that."

We need to have an open communications standard for the 12 to 20 visibility tools out there already, all proprietary. For the Tier 2s and Tier 3s not using EDI, visibility through the Internet is really good stuff. However, the Tier 2s and Tier 3s today must go through at least five or six screens to get all the information about all their customers. They have to go through the Ford system to see what's going on at Ford, then through the General Motors system to see what's going on at GM, then through Supply Solutions to see what's going on at Johnson Controls, then through QAD's MFGx.net to see what's going on at Metaldyne or DURA, and so on.