GM, Turning The Practice Of Warehousing And Distribution Inside-Out
FOR RELEASE: September 26, 2001General Motors, Turning The Practice Of Warehousing And Distribution Inside-Out
DEARBORN, MICH. - Getting the right part, to the right place, at the right time takes an inside-out perspective, according to Ronald T. West, general director of Warehousing & Distribution for General Motors Service Parts Operations (SPO).
Internally, a business must have an external focus - must open communications lines to let partners help us achieve success.
Speaking here today at the Autologistics2001 Conference on "Turning the Warehousing Business Inside-Out," West said that GM SPO has achieved significant improvements in delivery, responsiveness, quality, productivity and cost by redesigning the interior and reshaping exterior relationships. On the inside, SPO's new facilities are designed with a correct template warehouse layout, an inventory management system that is configured right, and a properly trained work force. On the outside, transitioning to working closely with suppliers was the final nail into the solid infrastructure for success.
West shared benchmarking learnings and defined the strategy that helped SPO achieve these improvements.
"First, we had to improve our quality and responsiveness throughout our existing parts distribution centers, while lowering structural cost," West said. "We centered on implementing lean and common processes that would produce a measurable, positive impact. We looked at various metrics to track performance and set aggressive and measurable improvement targets."
The second strategy West talked about was evaluating best practices in existing PDCs through a competitive warehousing pilot. "We learned from this pilot that in order to maximize delivery performance improvement or optimize the related savings -- that smaller, less complicated facilities are more efficient."
SPO's third strategy was separating its ACDelco and GM Parts business into dedicated facilities. Applying the lean and flexible concepts helped improve SPO's customer focus by reducing the complexities of the ACDelco business - reducing order fragmentation and lead time and improving availability and order response time.
Employees are the ones that make the processes work. "Our employees are our local warehousing and customer service specialists. They are highly trained, very skilled and are making this whole thing work. They are the ones who will help us achieve world-class status," West said.
With the internal pieces in place, West discussed the work that took place externally with Schneider Logistics. "We collaborated with Schneider Logistics to come up with an innovative solution that addressed that common interest," West said. The solution modifies inbound material process, levels material flow, communicates schedules and priorities, monitors performance and tracking methods, and provides for further improvements. Recruiting Schneider Logistics to work shoulder-to-shoulder, rather than at arms-length, allows SPO to lay solid groundwork to become a leader in the industry, decrease costs and increase productivity.
SPO's warehousing facilities are incorporating some of the best concepts and processes known today. "We have designed-in flexibility with the potential to grow as the business dictates," said West. "As our work force applies these new techniques and processes, we are solidifying our competitive position."
SPO, headquartered in Grand Blanc, Mich., markets automotive replacement parts and accessories worldwide under the GM and ACDelco brand names. SPO also provides inventory consultation and recommendations for improvement in both parts, accessories and service merchandising under the GM Goodwrench Service Plus banner. For more information, visit the ACDelco web site at acdelco.com and the GM Goodwrench Service site at gmgoodwrench.com.
General Motors , the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide. In 1999, GM earned $5.6 billion on sales of $176.6 billion. It employs about 388,000 people globally.
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