Delphi Becomes Leaner With Divisional Integration
11 July 2000
Delphi Becomes Leaner With Divisional Integration
FLINT, Mich., July 11 In the first six months of the year,
Delphi Automotive Systems has become a leaner, more efficient
operation due in part to the integration of two of its divisions, the former
Delphi Energy & Engine Management Systems and Delphi Chassis Systems, now
known as Delphi Energy & Chassis Systems.
To date, the integration is making good progress, said Guy C. Hachey,
president of Delphi Energy & Chassis Systems. It is projected to save Delphi
more than $30 million for the 2000 calendar year.
"Plans that were laid out by function and by region to take advantage of
synergies are on track, with virtually all functional areas realizing
savings," Hachey said. "As additional common processes and systems and best
practices are identified and implemented, further efficiencies will be
achieved."
So far, the benefits have included:
* Streamlining the structure to eliminate redundancy. The integration of
the divisions has resulted in the consolidation of functional staffs that meet
the collective objectives of the integrated division. Each function now has
one leader with one staff to help support the customer.
Delphi's recent announcement that it will consolidate its Energy & Chassis
Systems headquarters into a new facility in Troy, Mich., will help to further
facilitate this process. Currently, the Delphi Energy & Chassis headquarters
is located in Flint, Mich.
This consolidation will better utilize employee resources and create
synergies among divisional administrative staffs.
* Zeroing in on our products and customers. The move to a new
headquarters is just part of the effort being made to improve efficiency and
increase Delphi's product line focus and value stream ownership, all while
maintaining the distinct product lines that Delphi has committed to supplying
to its customers.
The creation of business lines with dedicated product line management is
improving the product-line value stream, the product strategic plan, and
ensures customer requirements and growth objectives are met.
"Of course, our ultimate success is defined by our customers," Hachey
said. "We are creating a culture of excellence by making sure everyone is
focused on the customer. Our vision is to be recognized by our customers as
their best supplier."
The result of this sharper product focus is the booking of new business,
which includes:
-- As previously announced, Delphi's recent signing of contracts with
three automakers valued at $350 million over the life of the contracts for its
portfolio of engine management systems.
-- The recent booking of 20 contracts from three customers that was
recently announced totaling approximately $2 billion over the life of the
contracts for Delphi's brake product lines.
-- Sales of Delphi's line of converters and catalysts, which totals
approximately $134 million over the life of the contracts.
-- Several agreements for Delphi's line of batteries, which totals
approximately $65 million over the life of the contracts.
In addition to this new business, Delphi announced earlier this year that
it signed a memorandum of understanding for a co-development agreement with
BMW and Renault to use solid oxide fuel cells as auxiliary electric power for
cars and trucks.
* Commonizing practices to gain greater efficiencies. One of the biggest
benefits to the creation of the integrated division is the commonization of a
business planning process. Each leader within the organization is responsible
for monitoring the progress of goals and initiatives that are targeted at
Delphi's being recognized by its customers as their best supplier. In
addition, the integration has created a single divisional human resources
management process that has helped to mobilize Delphi's people around the
world.
* Advancing lean concepts to eliminate waste. Another significant
benefit to the integration is the common implementation of the Delphi
Manufacturing System as well as the use of lean concepts in engineering
product development throughout Delphi's manufacturing locations and technical
centers worldwide.
Through the implementation of lean concepts, Delphi's manufacturing
operations and engineering product teams have made improvements in inventory
turns, total product cycle time, overall productivity, time-to-market and
asset utilization, Hachey said.
"The implementation is led by plant managers and chief engineers who
understand lean concepts, DMS, and the implementation of improved flow and
cost elimination throughout the value stream," Hachey said.
"The integration has shown us that we can identify savings while still
maintaining a distinct product focus and reshaping our culture to improve
customer satisfaction," Hachey said. "We continue to learn every day."
Multi-national Delphi Automotive Systems, with headquarters in Troy,
Mich., USA, Paris, Tokyo and Sao Paulo, Brazil, is a world leader in
transportation and mobile electronics components and systems technology.
Delphi's three business sectors -- Dynamics & Propulsion; Safety, Thermal &
Electrical Architecture; and Electronics & Mobile Communication -- provide
comprehensive product solutions to complex customer needs. Delphi has
approximately 213,000 employees and operates 176 wholly owned manufacturing
sites, 41 joint ventures, 53 customer centers and sales offices and 30
technical centers in 38 countries. Delphi can be found on the Internet at
http://www.delphiauto.com .
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the "Act") provides
a safe harbor for forward-looking statements made by us or on our behalf. All
statements which address operating performance, events, or developments that
we expect or anticipate may occur in the future, including statements relating
to volume growth, awarded sales contracts, and earnings per share growth or
statements expressing general optimism about future operating results, are
forward-looking statements. These statements are made on the basis of
management's views and assumptions; as a result, there can be no assurance
that management's expectations will necessarily come to pass. A list of
factors which could impact future events and performance is included in the
Delphi Automotive Systems Corporation 1999 Annual Report on Form 10-K filed
with the Securities and Exchange Commission.