Strategic Supply Chain Management - Supply Chain Online

220 Strategic Supply Chain Management
“right” vehicles but sent them to the “wrong” dealers because there was
no mechanism in place for matching production with demand. Now GM
does its best to make sure that dealers get the vehicles they want. To speed
order delivery, the new process looks for the fastest way to fill orders. Is
a desired vehicle already in production Scheduled for assembly Available
at another dealer’s lot Close enough to a vehicle currently in production
that a few adjustments will seal the deal Orders are viewed daily,
and assembly schedules are adjusted accordingly.
When desired options are constrained by parts availability, those
constraints are systematically flagged, analyzed, and minimized through
a new constraint-elimination process. Strategic parts buffering has been a
useful new approach to minimizing parts shortages (and order constraints);
a new tool has been implemented that enables GM to stock up
on select parts and materials that are potential bottlenecks. Getting the
right part to the right operator in the plant at the right time is critical. With
better supply chain visibility and a focus on strategic parts buffering, GM
has been able to improve parts availability overall, boosting quality and
cutting costs.
Although demand forecasts still drive production—long lead times
for certain materials make this the most practical approach—GM now balances
its traditional build-to-stock model with more build to order to lower
inventory levels throughout the distribution chain and better respond to
customer needs. The company now accepts new orders on a daily basis and
can schedule them for the assembly plant the same day and have them
come off the line in the same week.
As a result of these changes, lead times for special orders and dealerreplenishment
orders have improved by 60 percent, and customer surveys
show that GM customers receive their vehicles eight days faster than vehicles
from competitors. Delivery reliability also has improved dramatically.
Today, GM meets its delivery date commitments 90 percent of the time.
Now recognized as one of the most reliable suppliers to the commercial
fleet market, GM recently received Fleet Magazine’s Best Order to
Delivery Fleet Company award for the second consecutive year.
And since production better matches demand, customers have a
greater probability of receiving their first-choice vehicle. Orders affected
by constraints have been reduced by over 90 percent. GM received its
best-ever National Automobile Dealers Association (NADA) survey
results for OTD/distribution elements for allocation system, product availability,
and timeliness of delivery. And it’s realizing higher margins on
vehicles that are built to customer order.