Automotive suppliers are under constant cost pressure. OEM’s usually demand annual cost reductions. They also want flexibility on the part of their suppliers.
Having smart employees and managers will overcome these challenges…to a point. Employees and managers understand their jobs very well. However, their ideas for improvements in their areas may cause problems in other parts of the production process. At some point a standard process that takes all of production or the firm into account is needed.
An OEM needed to cut costs in parts management and discovered that the transfer of parts from prototype to production was experiencing delays that were costing over $26 million. By applying a standard method, the root cause of the problem was found and a solution was made that ensured the entire parts management process ran better. The standard method involves:
· Defining the process or exact problem to be solved
· Measuring the process or problem to better understand it
· Analyzing the problem to develop possible solutions
· Deciding on the final improvement
· Controlling the improvement to make sure it works over time
This approach can be applied in a number of different ways. One way that works very well is to perform the Define and Measure steps on a process basis, rather than just a project basis. This gives more information about the total process and identifies all of the areas for improvement and allows management to see all the issues together. Individual improvements can then be worked through fast improvement events.
The result is a list of cost saving ideas that are aligned to the total process that can be used to meet price reduction initiatives from OEMs.
Drive Consulting Group LLC
Bill Gripman, Managing Director
844-DIAL DRIVE (342-5374)
Drive Consulting Group works with their clients to create robust, flexible, efficient and effective organizations and processes. Bill Gripman has over 17 years’ experience working with senior leaders in commercial and public service organizations to make their processes more effective and efficient. He has led the design and implementation of four major process excellence implementations. His experience includes work with Big 4 automotive, logistics, product development and manufacturing. His teams have been on the cutting edge of making continuous process improvement more effective and accessible to non-experts. His specific areas of focused expertise are in “Business System” deployment, and strategy deployment. Formerly, Bill was a Principal with George Group Consulting and a Senior Executive with Accenture. He earned his MBA from Purdue University and his MALD in international law and diplomacy from the Fletcher School of Law and Diplomacy.