Delphi Takes Supply Chain Management to a New Level
13 September 1999
Delphi Takes Supply Chain Management to a New Level; Grows With DaimlerChrysler in Europe
GRAZ, Austria, Sept. 10 -- Delphi Automotive Systems
has not only demonstrated industry leadership in modular cockpit
assembly, but has redefined supply chain management and established the
industry benchmark with its support of the Mercedes-Benz M-Class cockpit
module.
Due to overwhelming worldwide demand for the M-Class, Mercedes-Benz U.S.
International (MBUSI), a business unit of DaimlerChrysler, recently began
producing supplementary vehicles in Graz, Austria. Delphi, progressively
growing with MBUSI over the past decade, was awarded a four-year contract to
supply M-Class modular cockpits to MBUSI here from its facility in Tuscaloosa,
Ala. The contract, estimated to generate more than US$28 million, involves
orchestrating complex logistics.
For MBUSI in Tuscaloosa, Ala., and Graz, Austria, Delphi:
* manages 46 suppliers in six countries;
* assembles a cockpit from 180 components into 8,000 possible
combinations;
* receives an electronic order every 2.8 minutes, manufactures and
delivers a specific modular cockpit to the customer in Tuscaloosa in 120
minutes from the point of order to installation, sequenced-in-line and just-
in-time;
* manufactures a cockpit in Tuscaloosa for a vehicle that will be
assembled at the Steyr-Daimler-Puch facility 5,000 miles away, delivers it
just-in-time, sequenced-in-line, six weeks after receiving the order;
* makes more than 60 just-in-time deliveries between two locations, on
two continents, every day;
* developed the infrastructure to monitor and track material en route to
Delphi's manufacturing location, through every step of the manufacturing
process, up through installation on Mercedes' assembly line;
* has only two days of inventory; and
* provides full-time engineers at both of the customer's assembly
facilities, on-site, every day, who are familiar with the cockpit module and
the customer's vehicle.
"With our global engineering and customer team, Delphi was able to provide
the upfront planning and engineering support in Stuttgart, Germany. Delphi
set up operations within 10 minutes of MBUSI's Tuscaloosa facility in 1997 to
manage the assembling, sequencing, distribution and critical timing for
modular cockpit supply," said Chris Duda, Delphi's manager of Mercedes'
M-Class program. "When MBUSI began shipping M-Class parts and modules to
Graz, Austria from the U.S., Delphi developed a staging center in Graz that
receives shipments from Delphi in Tuscaloosa. We're located within five
minutes of the customer, delivering modular cockpits for final assembly,
just-in-time and sequenced-in-line."
Delphi manages a supply chain that includes 46 suppliers in six countries.
These suppliers provide more than 180 components, which are selected in the
appropriate combination to build the modular cockpit. These pieces include
the steering column; heating, ventilation and air conditioning system; upper
and lower instrument panel; air conditioning outlets; glove box; instrument
cluster; passenger-side airbag and wiring harness.
There are currently more than 8,000 combinations of cockpits based on
color, switch array, left- and right-hand drive, etc. The modular cockpits
are assembled, and mechanically and electrically tested, at Delphi's
Tuscaloosa Service Center.
Duda said the modular cockpit build process is the same whether the
cockpit is designated for Tuscaloosa or Graz; however, there are differences
in timing and delivery, which adds complexity to the logistics.
"MBUSI sends Delphi an order for a specific configuration of a cockpit
module six weeks prior to final assembly in Graz, compared to the 120 minutes
from the point of broadcast to the point of use in Tuscaloosa," Duda said.
"Therefore, for cockpit supply to Graz, the lead time from receipt of order to
final delivery is longer, the packaging is more robust and the sequencing
process is different. And although we have increased production volumes, we
have not increased our inventory."
At the Tuscaloosa Service Center, Delphi assembles and delivers more than
300 cockpit modules every day to MBUSI in Alabama, and blends in the
production of the cockpit modules scheduled for Graz. The Graz-designated
cockpit module is taken from Delphi's assembly line and placed in a special
shipping container, designed to help protect the cockpit from damage during
shipment.
"One of the most important elements in supplying and shipping modular
cockpits to Graz is the packaging," said Dean Kirkland, Delphi quality
manager. "We -- Delphi and MBUSI -- worked together to design a delivery
system that incorporates packaging as a tool. The cooperation of our
engineers has made this project successful."
Kirkland explains that a high-tech assist device, or a "manipulator," is
used to pick up the 130-pound cockpit and place it onto an individual shipping
container.
"There are pins that need to be perfectly aligned, and the cockpit must be
grabbed precisely for placement so that it is not damaged," Kirkland explains.
"A similar device is used at the assembly facilities in Tuscaloosa and Graz
for placing the cockpit into the vehicle."
The shipping container destined for Graz contains a modular cockpit for a
specific vehicle and a kit for that vehicle. The kit includes a bussed
electrical center and a trim piece that matches the cockpit trim for the
center console of the cockpit.
Every day, several "seatainers" (containers designed for the sea) are
first transported by truck from the Tuscaloosa Service Center to the port of
export in Charleston, S.C. The seatainers are then transferred by ship to
Bremerhaven, Germany. From Bremerhaven, the cockpits are delivered by truck
or rail to a facility in Graz.
"At our logistics center in Graz, the electrical centers and trim consoles
are removed from the container and stored in one area, and the cockpits are
stored in a different area," said Ed Manusakis, manager, production control
and logistics. "We essentially deliver the cockpits to ourselves, before
sequencing them in-line for delivery to the Steyr-Daimler-Puch facility, where
the M-Class is assembled. This allows us to inspect the cockpit to ensure we
are delivering a quality product."
Delphi works from a series of electronic signals to establish proper
cockpit module sequencing. The cockpits are placed on a delivery buggy,
sequenced for final delivery and then loaded onto the delivery truck. The
electrical center and trim console are placed on a separate pallet. The floor
console and electrical center are delivered to a specific point in the
assembly line, and the cockpit is delivered to its location on the line.
Several deliveries are made every day.
Duda said that managing the complexity of such a global program requires
discipline and a vast array of technologies, but providing technical support
is equally important. Delphi's global network of technical and commercial
people is in place, meeting MBUSI's needs.
"One of Delphi's core competencies is supply chain management, but another
service we offer to our customer is on-site support," Duda added. "At the
Steyr-Daimler-Puch facility, Delphi has two customer service engineers located
on-site. We have one person for each shift at MBUSI to handle any Delphi-
related issues that might arise. No other supplier provides that type of
support."
As vehicle manufacturers are designing vehicles and assembly facilities,
it is clear that the use of modular assemblies is a trend of the future.
Through modularization, increasing numbers of vehicle manufacturers are asking
suppliers to become more deeply involved partners in the business.
Flexibility, simplicity and affordability are three key elements sought in a
supplier who is a single-point contact for modular solutions, such as Delphi.
"As a customer, MBUSI does not see all of the intricate details involved
in regulating the highly disciplined and synchronized system," Duda explains.
"What MBUSI does see is a completed, fully tested, fully warranted modular
cockpit, delivered at the right location, for the right vehicle, at the right
time. We manage the entire supply line so Mercedes doesn't have to."
Delphi Automotive Systems, with headquarters in Troy, Mich., USA, is a
world leader in automotive component and systems technology. Delphi's three
business sectors -- Dynamics & Propulsion; Safety, Thermal & Electrical
Architecture; and Electronics & Mobile Communications -- provide comprehensive
product solutions to complex customer needs. Delphi has approximately 201,000
employees and operates 168 wholly owned manufacturing sites, 51 customer
centers and sales offices, and 27 technical centers in 36 countries. Regional
headquarters are located in Paris, Tokyo and Sao Paulo. Delphi can be found
on the Internet at http://www.delphiauto.com