Strategic Supply Chain Management - Supply Chain Online

AUTOLIV PROFILE: Applying Rocket Science to the Supply Chain 47
supplier. Instead, it proposed a collaborative effort that has paid off handsomely
for both companies.
“When I first heard that my big customer was going to send a supplydevelopment
group to help me run my shop, it wasn’t something that I was
really looking forward to,” says John Rosbottom, production director at
Greening Donald. “But now I have nothing but good things to say about it.”
Skinner’s team helped Greening Donald move from a large-batch
production model to a small-batch model and establish standards for every
connected process in the production line. A system using cards, or kanbans,
to pull product through the process was instituted. Within just 14
months of accepting Autoliv’s offer to help optimize its production
process, Greening Donald cut its scrap volume in half and reduced its
inventory of finished goods by 30 percent. “Of all the companies I have
ever visited that claimed to be running a lean manufacturing system,
Autoliv is by far and away the most impressive,” Rosbottom says. “The
way that they came to us, understood our processes, and helped us
improve the flow of products throughout our facility has really paid off.”
The Greening Donald example has been replicated, in varying
degrees, with many of Autoliv’s biggest suppliers. To further support and
enhance collaborative efforts with the supply base and to smooth the interfaces
along the supply chain, Autoliv rolled out a new Web-based tool in
2002 called the Autoliv Partner Portal. The portal gives its suppliers visibility
to all Autoliv’s purchasing requirements, standards, production forecasts,
terms and conditions, and the status of materials flowing along the
supply chain.
IT WORKS, BUT IT’S NOT EASY
From start to finish, including the modest efforts at reform before it turned
to Toyota for help, it took Autoliv nearly ten years to fully transform its
manufacturing and supply systems. Because
of the organizational learning it internalized
from that experience, it is helping its suppliers
improve at a faster rate. But senior management
at Autoliv is quick to point out that
change of this magnitude is very hard to
achieve and requires complete and active
support from the entire organization. “It can’t
just be an edict,” Markert says. “A company
has to be willing to invest in a comprehensive
It took Autoliv nearly
ten years to fully
transform its
manufacturing and
supply systems.