Automotive Component Supplier Planning

Enhanced long-term supplier visibility and planning

Situation:
A global manufacturer of vehicle seats sought to maintain 100% OTIF but suffered from inadequate visibility to component suppliers’ capacity at the machine and tooling levels. Delayed inbound deliveries were costing our client in excess of $110 MM in avoidable airfreight costs.

Actions:

  • Assessed current state, especially the scope and discipline of the Sales & Operations Planning (S&OP) process
  • Implemented an Integrated Business Planning (IBP) process with a strictly scheduled calendar of meetings: Sales, Marketing, Demand Planning, Manufacturing, Supply Planning, Distribution Planning, and top decision makers
  • Implemented Long-Term Planning Control Tower to analyze and take corrective action on capacity issues on a 20-week to 18-month timeframe and an 18-month to 5-year timeframe, with special attention to capacity issues of component suppliers

Results: Reduced airfreight costs by 43% within 6 months of implementation. Enhanced operational performance and reduced shipment deviation fire-fighting.