SUPPLY CHAIN MANAGEMENT

At International Automotive Company

Group Members
Amna Iftikhar 09108035 Wafa khushnood 09108025 Mohd. Haris 09108022 Adeel Ahmed 09108021 Ahmed Mir 09108109

International 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 plant

There 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.

SCM elements

Transparency Standardization Optimization Flexibility Planning Innovation Problem solving Lean management Closeness of suppliers Cooperative orientation

Most important SCM Elements for IAC

Optimization Lean 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.

Cause of Overusing Premium Freight

Inefficient 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

Steps to over come the premium price

By 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 Resources

Ineffective 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 overproduction Mistakes at the time of ordering

IAC Measures To Improve the Ratios of Orders

Three operators to one office 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 Improve the Ratios of Orders

.

765 employees to $7 million in monthly sales: 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 Management
Warehouse 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 $6711

Total cost:

SCENARIO 1:

Total transit time: 21days $5011

Total cost:

SCENARIO 2:

Total transit time: 23days $5561

Total cost:

Challenge for Salinas

Salinas greatest challenge centered on IACs employees at the time in which SCM had been adopted at IAC Reynosa. Cultural practices Resistance to change Lack of loyalty Lack of skills

Supply Chain Management At International Automotives

.

Any Question :(
A

N Y Q U E S T I O N