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Supply Chain ManagementAt International Automotive CompanyGroup
MembersAmna Iftikhar 09108035Wafa khushnood 09108025Mohd. Haris
09108022Adeel Ahmed 09108021Ahmed Mir 09108109International
Automotive Company (IAC)Fifth largest family-owned company in the
automotive suppliers.
14172 employees
Total turnover in 2009 was US$ 3.6 billion.
Company manufactured window regulators, door systems, seat
systems and electric drives.
International Automotive Company (IAC)Main customers are: Ford,
BMW, Chrysler, ACH, Nissan, Suzuki, Toyota, VW and Bosch.
The company have 46 plants in 21 countries.
IAC have reached to more than 100 customers.
Reynosa plantThere are 403 employees in the Reynosa plant.
The spread over a 10,000 square meters.
Paul Salinas has appointed as managing the supply chain in the
Reynosa plant and the plant that IAC had just acquired from motor
company II in
Reynosa.SCMelementsTransparencyStandardizationOptimizationFlexibilityPlanningInnovationProblem
solvingLean managementCloseness of suppliersCooperative
orientationMostimportant SCM ElementsforIACOptimizationLean
management By using optimization and Lean Management IAC can
minimize and remove wastes and non-value adding activities in the
transportation planning and warehouse management for maximizing
profits and to keep the high standards of the quality of the whole
processes.
CauseofOverusingPremiumFreightInefficient and Ineffective
Transportation Planning
Inefficient and ineffective warehouse Management They dont
realize earlier that how much number of units is available in their
inventory. And so they take a lot of orders but when the time came
to full fill these order they then came to know that they dont have
enough stock to meet that orders.Steps to over come the premium
priceBy adopting Milk run strategy in which they can go for the
maximum utility of transportation capacity.
The other strategy which they have adopted is EX- Work strategy.
With the help of this strategy they reduce their transportation
cost to 20 percent.
Warehouse Management Warehousing is a key element of supply
chain. Its aim is to controlling the movement and storage of
material within warehouse , involving the activities of receiving,
shelving, loading and shipment.Areas/Cause of wasted
ResourcesIneffective warehouse Management is the main cause of
wasting the resources.IAC had a warehouse in Reynosa and also
stored materials in another warehouse located in neighboring U.S
city, McAllen, TX which has created a lots of problems.No specific
location Unscheduled overproductionMistakes at the time of
ordering
IAC Measures To ImprovetheRatios of
OrdersThreeoperatorstooneoffice worker: They have added the ratio
recently ration was 3:1 and they have changed it to 9:1 its means
they are adding more employees in the manufacturing and according
to them it became very profitable but The Things goes opposite to
that the ratio of adding more employees to one worker only became
very unbalanced
IAC Measures To ImprovetheRatios of
Orders.765employeesto$7millionin monthlysales: on the second plant
which is a way more better than this IAC it is making more profit
than IAC as we see that Queretaro which is generating about US
$2million more than Reynosa as Reynosa is making the sales of 7
million with 311 more employees than Queretaro. Lean
ManagementWarehouse Management (minimum inventory) Previously there
is high inventory cost due to high inventory level and all record
is kept manually this creates ineffectiveness in warehouse
management. Standard bar codes label for optimal
spacing.Standardized packing size.Manual functions was replaced by
scanning bar codes .
Ground Transportation :
IAC improved communication with its suppliers and transporters
that make them able to get optimal order quantity for the plant.
This resulted in drastic decrease in the inventory level.
The milk run delivery In the past material is transported from
supplier separately this increase the cost.
IAC decided to implement the milk run strategy was implemented
that has reduced transportation costs and increased efficiency.
the three best routes were identify which collects the supplies
one after the other this could result in high truck occupancy rate
and had reduces the total number of raw material trucks
Ocean Freight Transportation
PREVIOUS SCENARIO:Total transit time: 30days Total cost:
$6711
SCENARIO 1:Total transit time: 21days Total cost: $5011SCENARIO
2:Total transit time: 23days Total cost: $5561
ChallengeforSalinasSalinas greatest challenge centered on IACs
employees at the time in which SCM had been adopted at IAC
Reynosa.Cultural practicesResistance to changeLack of loyaltyLack
of skills.Supply Chain Management At International Automotives
Any Question :(ANY QUESTION
