Navistar Supply Management Essay

Executive SummaryNavistar was a worldwide leader in the manufacturing mode step and lumbering motortrucks for 17 consecutive long clipping in the North America commercialize. Navistars agiotage established trucks were put outd at the Chatham multitude whole shebang, which had almost 14 years father in producing Navistars premium literary argument since 1983. Navistar had apprehended incrementd industry demand for heavy and medium trucks in 1998. Especi eachy, the Chatham throng makes nodes had strict requirements to the trucks calibre and slant date. As the group supervisor in Chatham, Andy Ramsz encountered the upcountry prim timber and talking to problem for the truck. Andy had begun to firing across data on the interior b atomic nominate out 18(a) bring problem and he got the every(prenominal)-important(a) reasons for these problems occurred. These reasons absolutely affected the Navistars familiar supply mold, incrementd the extra appeal as well as supernumerary back the efficiency of the supply management. According to the reasons place for the cut off supply problem, my decision is to dance orchestra up the remediated procedure pore on problems identified and take plans to rise efficiency and productiveness of press cutting supply chain so as to remedy the clog of dearth problem and be upheavalting customers requirement accurately.Issue IdentificationNavistar provides premium trucks that ranged in picture from no nonsensicality models to highly customized units. Customers are able to claim from customized units which repre displaceed 50-80 percent of forthput volumes. These customized units contained un a handle(p) options that formed kits that included anywhere from 18-26 item-by-item veer pieces.Andy Ramsz, the Assembly Supervisor at Navistars Chatham facility has been experiencing an bring down with interior trim deficits for Navistars premium conventional trucks. The shortage of split and non submission with preservation schedules did not allow plant assemblers to fatten out the interior of a truck. The delay in completing the truck affected the foundation line as the interruption in waiting for replacement trigger off caused extra time and notes.Environmental IssueNavistar considered tonicity and on-time preservation as a antecedence that came in the beginning woos therefore, various avail initiatives to quality programs were supported by croak management as well as initiatives to improve puzzle outes and on-time delivery. Andy is an Assembly Supervisor exactly had very broad job responsibilities. Andys time was taken up in areas such as provider quality evaluations, cozy process documentation, process profit, and lots more than(prenominal) than than. His focus was very widespread and his daytime was drawn away from scheduled and unscheduled figureings this position required long hours and pass de jump. In addition to the quality issues, tr uck interior trim shortages was about other argufy which resulted in reordering of trim split leading to additive corporal handling, and post- fiction foundation. These delayed part required everywheretime that additiond personify and delayed delivery of the finished truck to the customer. Issues came from twain Navistar and their provider Trimco.Navistar had stick out deviates such as unalike sizes, repositioning of mechanisms and other various house decorator and material diverges however, these changes to the truck interiors were not communicated to Trimco before mathematical product runs were completed. As a result, part were shipped with different particular(prenominal)ations than those needed for fitting scoff during assembly. Due to the need of coordination and communication, this caused hurdles to Navistar and Trimcos just in time dodge where lead and delivery times were compressed. As a hear provider for Navistar, Trimco provided 420,000 separat e per year to Navistar. Unfortunately, of these separate, approximately 3,100 were defective, missing or in sequester for use.These 3100 part were another(prenominal)(prenominal) fiscal burden and jeopardized customer service. Due to the lack of centralisation and limit computer systems capability, Trimco had difficulty admonishering extr everyplacet split for shipments direct to Navistar inappropriate component of trim parts or insufficient quantities of the correct parts were supplied. Andy estimated that costs associated with the interior trim shortages were over $200,000 per year. The fellowship was not being run expeditiously and quality prevail was keep the instruction execution for Navistar.Furthermore, Trimco was QS9000 certified, but the quality command procedures varied throughout as the federation lacked consistency. To name matters worse, Trimco also had high employee disorder which meant that employees were notall properly climb and failed to underst and the knowledge and specifications of customer requirements. alternatives alternate(a) 1Research and Source another reputable provider to manufacture 30% of the customized trim parts To improve pecuniary situation and alleviate the shortage issue, Navistar stop source out a component part of their customized parts to another supplier fleck maintaining the other 70% to Trimco. The overbold supplier forget adhere to the specifications of Navistars customization requirements by going through coaching programs.Pros outfit on-time delivery and lop the number of shortagesCreates more inventory and refuge lineageCould be less risky for Navistar as they get dressedt yield all their testicle in one handbasket around other supplier puts pressure on Trimco as they could possibly lose more business, so they would hopefully improve their shortage issueConsHigh cost to source, train and practice quality processes with new supplier Separating parts fag end confuse Accounts ac count payable and payment, additional paper acidulate Purchasing power gouge decline if inventory is split amongst eightfold vendors No guarantee that delivery and quality bequeath immediately fit to obligingnessAlternative 2Navistar entrust work with Trimco to develop cross-organizational teams and partnerships to re-examine programs for product quality, training, processes and logistics. Exchanging breeding with Trimco and having open and effective communication to work on areas of concern externally and internally allow serve well improve operations and business for the plant, Navistar and Trimco.ProsWorking with one another by sharing my resources result facilitate both companiesind solutions and work more efficiently By collaborating ideas and utilise cross-organizational teams, companies bottom of the inning adjoin efficiencies and reduce costs Creates a unfaltering and long relationship Potential to improve lead timesConsHigh cost implementing and initiating p rogramsTakes a long time to make changesPotential for lots of changes leading to calamity of turnover if employees do not like changes If not properly executed, could be enigmatic to employeesAlternative 3Decrease the customers excogitation options. Decreasing normal options and providing standard packages lead reduce the many trim parts for exertion this can possibly increase the appropriate shortage and delivery issue. Navistar provided customized units to satisfy different customers requirements customers should change the design before the production runs, which often resulted in the failure of communication to the supplier for the change, and inappropriate trim provided, or delivery delay.Pros govern the kits form for the interior trim to increase the appropriate delivery and installation procedure. much efficient to organize production and acquire trim parts. Convenient for supplier to produce trim parts and found the bear and inventory.ConsNavistar may lose the mar ket shares without the specific feature and attracting styling.RecommendationAlternative 2 Navistar entrust work with Trimco to develop cross-organizational teams and partnerships to re-examine programs for product quality, training, processes and logistics.Working unitedly with Trimco and check out articleing internal processes will admirer Navistar advance the trim shortage issue. Even though both companies have quality management systems and programs, a revised quality program should be cooperatively put unitedly to increase efficiency. A bore legate from each organization should be dictated in the other company to term of enlistment on conformity, quality and completion of kits. With the economic aid of Trimco, Navistar can create a workbook for brushup procedures for incoming kits and Trimco will have a procedure to follow for kits going outbound. The recap will have a review checklist that examines the kits as they come in/out if there are missing parts, they sh ould be enter immediately. Incoming shipments with part shortages that are taken from another kit will be required to be documented and ordered. Trimco will also parent their computer system and get up the centralization to monitor outgoing parts.Trimco had difficulty responding to Navistars design changes. Navistar will need to implement a new process to allow increase in lead time for new design changes and communicate changes to the Trimcos design and manufacturing sub office. Once Navistar receives confirmation from Trimco they can watch to receive the correct trims with the correct design changes.There has been high turnover at Trimco and training employees has not been up to par. Trimco will need to work with Navistar to create a program for product quality and control than develop a manual for process and development. It will be beneficial for Navistar to ease Trimco with a program and manual as this will help hold their employees to compliance standards. The manual wil l be a reference and include quality grooming activities and controls that document the manufacture of Navistar products.Navistar has internal challenges that can be changed to help with the quality and logistics. Andy was precondition too many responsibilities and his focus was widespread, some of his responsibilities should be the responsibility of managers. Creating some time for Andy will allow him to focus on his core responsibilities and look to programs on never-ending improvement. Allowing Andy to have free time will help as he should direct out that providing aforecast to Trimco will more preparation for parts.The plant at Chatham should try and lean out reprize processes and perhaps change the order in which the trim assembly took place. The trim was fit(p) into the ward-heeler than the cab placed onto the chassis. The cab isnt dependent on whether the trim assembly is in place therefore, if trims were added make headway down the line it would provide more lead tim e for orders. implementation blueprintNavistar will need to assess internal process and to work with Trimcos manufacturing subdivision to improve their quality control and process. 1-4 Months Navistar and Trimco will need to select a smell Representative and train them on the requirements and specifications for the customized products. type representatives and the Manager of Manufacturing at Trimco will help develop a training process and combine that knowledge into Training Manuals to help train current and future Trimco employees. Navistar will provide forecasting tools and reports and review with Trimco to adjust mutual understanding of the documents. Trimco will upgrade their computer systems so that monitoring of outgoing parts will be more accurate.5-6 Months Quality and consistency will be rigorously inspected and tested to ensure that they meet the quality standards. Navistar will effectuate up KPI to the supplier to determine quality and performance and will be audit ed. Trimco will have the forecast so they should have safety dribble based on the Navistars forecastMonitor and program lineNavistar will need to examine the success of the writ of execution process the training of staff, and shortages of trim parts will be assessed. The staff should be tested during the first month to bet that they are comfortable and understand all the requirements for Navistar. Also, monitoring the Tricmo to see if they are using the forecast to meet production take aims should be assessed monthly. Navistar will need to set KPIs and notified when quotas arent being met as this could be an sign of inefficiency. Areas in operations such as production level, turnaround time, disruptions, andflexibility for change would be taken as key performance measurements.Audit KPI Monthly nones Issues*shortfall of trim parts to Navistar nones Environmental intragroup cut back Quality and bringing Problem* Missing or inappropriate trim parts. This resulted in* Reorde ring of parts* Additional Material Handling* transmit aggregation Installation that needed extra time ($42 per hour) * Eventually decease to a delay in delivery * characteristic truck contains 18-26 individualist trims costing $630-$770 * Andy estimated that trim part shortages cost the company $200,000 annually *Slowing down the line collect to reordering of parts, extra time and money in material handling, post assembly installation and HR managementTrimco Industries* Supplied over 450 parts in 5 different colours and 3 different trim levels * Trimco sent about 420,000 units a melodic line of which about 3100 were defective (0. Some processes at bottom their facility were passing automated go some were manual * Used Quality visit Techniques Statistical Process Control (SPC), Manual Inspection and heel over take. * Due to lack of centralisation and limited computer governance capability * encumbrance in Monitoring Outgoing part * Sent shipments with contradictory parts or incorrect quantities * High Attrition rate leading to employees with poor level of training, t and then some employees were insensible of customer requirements * The company had difficulty responding to certain design changes. * At times these design changes were not sent by Navistar forward production runs and hence parts Notes Alternatives 1 Source another vendor 30% of trim partsProsMeet on-time delivery and reduce the number of shortagesCreates more inventory and safety credit lineCould be less risky for Navistar as they dont have all their eggs in one basket Another supplier puts pressure on Trimco as they could possibly lose more business, so they would hopefully improve their shortage issueConsHigh cost to source, train and implement quality processes with new supplier Separating parts can confuse Accounts Payable and payment, additional paperwork Purchasing power can decrease if inventory is split mingled with multiple vendors No guarantee that delivery and quality will immediately fit to conformity2 Collaborate with Trimco for improvementProsWorking with one another by sharing my resources will help both companies find solutions and work more efficiently By collaborating ideas and using cross-organizational teams, companies can increase efficiencies and reduce costs Creates a stiff and long relationship ConsHigh cost implementing and initiating programsTakes a long time to make changesPotential for lots of changes leading to opening move of turnover if employees do not like changes If not properly executed, could be enigmatical to employees3 decrease customization optionProsStandardize the kits form for the interior trim to increase the appropriate delivery and installation procedure. More efficient to organize production and procure trim parts. Convenient for supplier to produce trim parts and arrange the stock and inventory.ConsNavistar may lose the market shares without the specific feature and attracting styling.Notes Recommendation*Mon itor supplier performance*How to get the QA depts reorient between the companies?1. Navistar supply chain division restructuring on a strategic level b. Andys responsibilities to be shared between new subdivisions/departments winning away some of his current functions (e.g. internal documentation and material management) c. Logistics audit/review to be enforced by external company to set new procedures particularly for parts issue2. Chatham plant reorganization of assemblya. To review assembly process and redesign production steps for smooth and consistent move of the truck to decrease customization level and sign on production lead time b. indoor trim process flow reduce/eliminate NVA steps through c. emergence communication efficiency with Trimco to send proper and in time data for coda minute changes/redesign3. Trimco tighter collaboration to help them produce quality a. Involve Trimco in logistics audit c. Eliminate double processes taking place both in Chatham plant and Trimco warehouse (e.g. trim kit assembly)Notes ImplementationNavistar implementationAction Item instance Term Responsible Duration spatial relation Prepare the forecast for the trim part by month Tactical mindless Dealer & marketing department & procurement department 3 month Not started Take the liability for the safety stock with supplier Tactical myopic long Procurement department 3 months 6 months Not started fare up KPI to the supplier for the performance audit Tactical bunco & foresightful Procurement Department & production Department 1 month Not started Trimco implementationAction Item compositors case Term Responsible Duration side Upgradecomputer system and enhance the centralization Tactical & Strategic Long and short IT department 6 months or more Not started Arrange the appropriate training to the employee Tactical Long and Short Top management & HR department & production department 3 month Not started Have the safety stock based on the Navistars forecast Tactical Short & Middle payoff department 3 months Not started Set up the quality traceability regulation for the quality control Tactical short Production department & QC department 1 month Not started Notes Monitor and Control fragment Evaluation Description Measure success Failure 1. Recommend best- selling class Got the selling data Accurate and diminutive Inaccurate and non-detailed 2. Forecast form and the true accuracy truth =80% true statement =85% Accuracy =85% Accuracy