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POV: Automotive Manufacturing Leader, Full-Throttle to Full-Brake

By
Ty Morgan
July 26, 2023
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Flint Michigan is a principal figure in the US automotive history books, and it is also my community of origin. The businesses and employees from the community have given a great deal of themselves to get the industry to where it is today. Growing up in Genesee County, I was indoctrinated into auto manufacturing at an early age. Relatives, parents of friends, spouses of my teachers, the retired neighbors; everyone was connected to the industry and influenced my curiosity for manufacturing. Coupling this interest with a Supply Chain Management degree from the big in-State university provided me with the opportunity to start my career with a Fortune 100 construction and farm equipment company. I spent 7 years working in various supply chain, purchasing, and manufacturing roles. I experienced multiple disciplines across multiple sectors in an industry that is heavily influenced by growing, planting, harvesting and construction seasons. Moving back ‘home’ I signed on with one of the big 3 auto manufacturers, furthering my understanding through roles in supply chain, global allocation, scheduling, inventory management, production system implementation, launch and operations management. I bring a solid foundational understanding of the entire value stream at Veryable.

While the automotive industry has a strong foundation in disciplined production systems, the pace at which it moves amplifies a lot of the challenges facing any business. There is often a feeling of full-throttle or full-brake to match the most demanding market in history. Operational leaders often find themselves driving to produce every vehicle, engine, transmission, and component as quickly as possible or delivering messages to their teams about cutting back and leaning out. Launches, especially with the new EV push, are coming at a breakneck speed and are susceptible to geopolitical headwinds. The labor force demographics and employee expectations are changing and have had symptoms of high absenteeism, complacency, and resistance to change.

These factors influence part availability and can be found impacting the following KPI’s:

  • Safety: it is always a challenge to maintain a safe, incident free environment with fast paced operations, operator complacency and burnout.
  • People: it can be tough to retain talent and keep morale high with excessive weekends and OT.
  • Quality: striving for very stringent standards of First Pass Yield or Parts Per Million with complex value chains being influenced by operators, high velocity launches, dual-sourced components, and design changes.
  • Responsiveness: meeting 99% On-Time Delivery in the wake of drastic market fluctuations without a reliable global supply chain. 
  • Cost: heavy focus on cost/headcount per unit, Non-scheduled OT (OT in general), drop-in expedite fees, logistics fees and scrap.

Leading organizations in this environment can be extremely challenging, especially when trying to maintain margins. There is a tremendous amount of overlap with these metrics. Each of them can adversely impact another.

The Situation 

Throughout my career I’ve been challenged by the constraints listed above. They’ve impacted me on the supply side as well as during my time on the shop floor. Scenarios like the one below are all too familiar to automotive industry leaders. 

We’ve all seen our customer schedules exceeding a normal 5 day schedule, requiring our teams to run shifts of production over the weekend. With a solid week of finishing around our daily target; momentum and morale would be high even in the wake of a full weekend run plan. You’ve left Friday with a solid plan and your best team lined up. You had your highest seniority operators and supervisors in the plant and they were supported by a full maintenance crew. Checking the numbers on Saturday morning, you saw that you’re maintaining ground, poised to start off the following week in a great position! Little did you know that things were about to change.

What Went Wrong:

On Friday night, one of your critical path machines had a motor that was starting to wear, and it was causing a feature on your assembly to be out of spec. This feature was low risk, had never had an issue in the years of the program and the operators who ran the cell had been in the company for generations. Surely this non-conforming feature was going to be caught… but the call from your shift leader on Saturday night proved otherwise. Your night shift supervisor was going through a quality audit and came across a batch of parts that were non-conforming. It appeared that the machine had intermittently produced non-conforming parts and your process and team had not caught it. The last known part from the suspect machine was from 4 shifts prior! Had some of these made it into assemblies? Do you have your arms around the situation? You now had hundreds of parts on quality hold and needed to execute a strategy ASAP. Your team had fallen victim to complacency and a plan built around reaction, not proaction.

Collateral Damage:

The challenge was complex. You had just lost a tremendous amount of ground on your customers; not to mention the potential monumental cost risk you had in front of you. The situation you were in put a strain on your entire organization.

  • Manufacturing had to perform the non-value-add sort of all materials and run OT to make up the lost units. 
  • Quality had to engage and analyze if the non-conforming parts could be salvaged. 
  • The skilled trades team had to turn off the machine, open it up, identify the issue, and fix it.
  • Supply chain teams needed to expedite in more raw material 
  • The labor force had to engage and strategize how to provide enough manpower to support your extraordinary efforts.
  • Engineering had to maximize machine capacity to recover from the loss. 

The whole organization was looking for an 8th day in the week. 

Reality is, manufacturing is not perfect and not all issues can be prevented. Leveraging the expertise Veryable has in the automotive sector would be an invaluable tool. Being a competitive, free-marketplace for instantly scalable labor, Veryable would’ve meant having a developed pool of operators (Your labor pool - ‘YLP’) ready to support demand highpoints and growth initiatives. Having to only pay for the hours worked; you’d see a direct correlation between service performed and output when needed.  This is one of the many reasons Automotive is the fastest growing industry segment for Veryable.

 

What would have been the benefit:

Getting the operation right-side-up as quickly as possible after an issue, is always the focus. Every minute spent carrying out non-value add tasks is money lost. While not completely preventable, these are the fears that keep operational leaders up at night and they can be drastically reduced with Veryable. You may have robust processes in place to prevent my example, but odds are, you are still being reactive. Are your teams in a position to win?

With a strategic approach to Veryable you’re better prepared to handle these types of situations.

  • On-demand labor would’ve been there to assist with the sortation in as little as 2hrs from the need. 
  • The Veryable operators would’ve eliminated manpower constraints from the equation allowing for equipment utilization to be maxed out; reducing the backlog.
  • Knowledgeable Full Time Employees would have been freed up for training, process improvements and improving the team’s flexibility. 
  • Holistic view of equipment health and a production plan developed to support preventative measures. 
  • Opportunistic buffering on off-shifts and weekends to allow maintenance time to handle repairs prior to failures all without paying time and a half or double time. 
  • Leveled-up employees in your organization; not doing the work of their subordinates. 
  • Eliminated the compounding effect of complacent labor and excessive OT. 
  • Destress the operation; boosting morale and agility.

Operations leaders are in a constant losing battle, when manpower is available the equipment is not ready. When you have the equipment, you can’t find the manpower. Veryable will have give the flexibility needed to be proactive while being cost effective. Focus on growing the business instead of running the business; delighting customers by giving them perfect delivery at a fair cost, ensuring your business is more than a capable candidate for new opportunities. 

This applies to much more than my example. As you work up the supply chain in automotive you can really see the effects of fluctuating demand and quality issues. Oftentimes suppliers get behind for some of these reasons and they never recover. There is simply no way for them to maintain the margins and overcome the back orders. OEMs, Tier 1, and Tier 2 suppliers are strengthening their supply chains by introducing Veryable into their supplier development programs to make sure labor is not a constraint, improving Delivery and helping drive year over year deflation efforts. 

Here are a couple of examples showcasing our impact in the automotive industry:

With 40% of Intertech’s business being services to Tier 1 and OEM suppliers, they experience significant swings in production schedules. Often running day-to-day scheduling, Veryable has been instrumental in lowering overall costs to help Intertech keep costs low for their customers.

“It’s important for Kendrick that it’s flexible, because our production demand is also something that we can’t always rely on to be the same, day over day,” - Jennifer Johnson, president of Kendrick Plastics

These examples highlight how Veryable helps drive a quicker response to demand variation and empowers operations leaders to take control, giving them the tools and the resources they need to run their factories.         

For more success stories, visit our automotive homepage.

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Ty Morgan

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