The Americans do it. The French do it. Even the Swedish do it. And given the chance, the South African automotive industry will also fall in love with the globally-accepted and most comprehensive self-assessment and improvement audit in the business.
The Global Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE) is the accepted industry benchmark in Europe and the United States for materials processes. It comprises a six-chapter, 206-criteria and 240-question audit and guideline that will identify gaps between the internal processes and the benchmark set by the MMOG/LE, which was created by the AIAG and Odette - the two automotive bodies for automotive manufacturers in North America and Europe.
Since it was introduced in 2004, over 1 000 audits have been performed globally and a recent survey by a European OEM, which had persuaded 46 of its suppliers to use the MMOG/LE, turned up favourable figures and savings. There was a 65% reduction in line stoppages, 53% reduction in rework, 17% less logistics incidents (such as packaging and labelling snarl-ups) and a 10% improvement in delivery time.
"It`s about adapting to the changes in manufacturing and for suppliers being able to gauge just how effectively they are servicing the manufacturers," said Andre van Vuuren, business development executive at QAD South Africa, a world leader in providing ERP and supply chain execution software applications and services to global manufacturers.
"We think that is an essential tool in the South African auto industry and we`re approaching the industry offering to do the audit for them. The MMOG/LE has, for instance, several self-evaluation categories, which include work organisation, production and capacity planning, customer interface, production and product control, strategy and improvement, work-in-process traceability and, perhaps most importantly, the relationship with the supplier.
"With warehouse space at a minimum, keeping the supply of parts constant and in step with the needs of the OEM is absolutely vital in South Africa. You slip up, the plant shuts down and you pay penalties - that is the reality. The MMOG/LE audit will alert suppliers to their weaknesses and, indeed, their strengths. It just makes good business sense to know your company inside and out, and to be able to rectify the weaknesses.
"Just some of the companies who are currently using the global MMOG/LE include Daimler Chrysler, Ford, Renault, Peugeot Citroen, Volvo Trucks, Volvo Cars, American Axle and Manufacturing, Bosch and Johnson Controls," added Van Vuuren.
QAD, a Nasdaq-listed company with headquarters in Santa Barbara, has been involved with the MMOG/LE since its inception, and was behind the recent updating of the guideline. The Automotive Industry Action Group (AIAG) and its European sister organisation, Odette, took on board feedback from current users and updated the MMOG/LE to make it more user friendly. At a meeting in Paris to review the update, Terry Onica of QAD was part of a group that included representatives from AIAG, Odette, Ford, Daimler Chrysler, Renault and Volvo.
For more information on MMOG/LE and QAD, please contact Andre van Vuuren on +27 11 461 6900 or e-mail anv@qad.com.
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