Quality & Industrial Performance

EXTERNAL LOGISTICS

“Going From Reactive to Proactive”

This presentation was developed by General Motors Corporation Global Purchasing & Supply Chain and PSA Supplier Development.
All rights reserved. No part of this material may be reproduced in any form, or by any method,
for any purpose, without written permission of General Motors Global Purchasing & Supply Chain or PSA Supplier Development.

Reference Doc-Info: 01601_13_00158

PSA GM Purchasing & Logistic Committee 1

 EXTERNAL LOGISTICS
Introduction
PURPOSE: SCOPE:
• Have a system that ensures product • Incoming material area
is delivered on time. • Shipping area
• Product at the right place at the right • Supply operations
time
• Robust shipping department that is
able to effectively respond to
shipping demands
• Appropriate levels of finished goods
to supply customers RESPONSIBILITY:
• Optimized level of stock. • Logistic Manager
• Plant Manager
• Supply Ops Manager

PSA GM Purchasing & Logistic Committee 2

 EXTERNAL LOGISTICS
Benefits
• Avoids plant disruptions (External and Internal

• Supports reduction activities in stock levels  Cost savings

• Increases flexibility in schedule changes  Cost savings

• Improves the fast response for urgent schedule changes

• Increases the logistic flow reliability through production flow optimization

• Ensures right part is delivered at right time

PSA GM Purchasing & Logistic Committee 3

 EXTERNAL LOGISTICS
Supply process (incoming), what are we searching for ?

Criteria of Requirement
1 – page 5-6
2 – page 7-12
3 – page 13-14
4 – page 15
Auditor hints – page 16

Prev. Requirement Next Requirement

PSA GM Purchasing & Logistic Committee 4

 EXTERNAL LOGISTICS
Incoming Area: Main Steps

• Typical Lay out and Sequence of Process at incoming area.

Reception De- Incoming

Transport Unloading conditionning
Transfer
Docks Stock

Administrative Control of quantity

Sampling
receiving Loading of empty
packaging
Palletization control
Labelling control

Quality
Control

PSA GM Purchasing & Logistic Committee 5

 EXTERNAL LOGISTICS
Process to Follow Supplier Deliveries (Example)

Start Logistic personnel will notify

Receiving area
monitors route arrivals
Route window times are Logistic personnel affected suppliers of transit on a dock visual. If on-
scheduled and visible on monitors incoming delays/changes. time. Receiver check-
route board shipment status to marks on time arrival.
Protocols are updated If early/late arrival, the
Logistic Protocol is the published schedule
(i.e. receive info via receiver places actual
document which
EDI, MGO, email, Logistic personnel will notify time of arrival in box
establishes the contract
web, phone) plant receiving area of and reason for non
with carriers & suppliers
transit delays/changes conformance

Any permanent changes

to the window time, lead
Logistic personnel tracks
time, etc. are noted, Logistic personnel
carrier performance and Receiving area delivers
updated in the route & receives shift results and
trends carrier non shipment results to office at the
receiving schedule, and analyzes all shipment
conformances end of each shift
communicated to the data
plant floor

Finish
PSA GM Purchasing & Logistic Committee 6
 EXTERNAL LOGISTICS
Tracking Board – Master Schedule of Delivering (Example)
Dock Problem /
A B C D Countermeasure
06:00

22:30

• Put in place a working planning in coherence with the plant takt time
• At the incoming , organize and optimize the activity on the basis of a stable
workload
• Visual management: quickly identify late deliveries & initiate as soon as possible
escalation process

PSA GM Purchasing & Logistic Committee 7

 EXTERNAL LOGISTICS
Tracking Board – Master Schedule of Delivering
(Example)

PSA GM Purchasing & Logistic Committee 8

 EXTERNAL LOGISTICS
Early Warning Communication

• Alarm Process communicates transportation exceptions to the Plant:

• Alarm #1: Schedule – schedules don’t cover reqmts.
• Alarm #2: Supplier – material not available to ship
• Alarm #3: Carrier – material not ready to pick up (when applicable)
• Alarm #4: Dock – carrier window time not met
• Alarm #5: Plant: Inventory drops below min.

Note: Alarm 2, 3 and 4 issues are related to logistics activities

PSA GM Purchasing & Logistic Committee 9

 EXTERNAL LOGISTICS
Alarm #2: Supplier warnings to plant

• All Tiers non-compliance to schedule issues (i.e. Quantity/Quality) should be

communicated to the plant through the logistic contact immediately when identified.
Tiers should then arrange for an expedited shipment per plant requirements

(Example)

PSA GM Purchasing & Logistic Committee 10

 EXTERNAL LOGISTICS
Alarm #3: Carrier warnings to plant (when applicable)

• Carriers are responsible to identify and communicate Supplier non-compliance

issues ( i.e. schedule part numbers / quantity) to the plant through the logistics
contact prior to leaving each Tier location

(Example)

PSA GM Purchasing & Logistic Committee 11

 EXTERNAL LOGISTICS
Alarm #4: Track inbound

• Dock schedule data provides a daily list of non conformances. The plant logistics
contact review the non conformances, then tracks & trends the results.

(Example)

PSA GM Purchasing & Logistic Committee 12

 EXTERNAL LOGISTICS
Logistic Protocol
• What
• Contractual document that describes all characteristics of the flow
• Locations of the points of departure & arrival
• Standard for the data exchange / Standard of orders
• Frequency and timing of transport
• Who
• Between Tier X and Tier 1 and between Tier 1 and customer
• Carrier
• Where
• Protocol is formalized through an information system
• When
• 1st validation: before the 1st mass production delivery
• Updated & verified regularly
• Organization shall identify the proper resources needed for the protocol
management on site. Any deviation in the protocol application shall be treated and
managed with action plan (alternative transportation mode, alternative packaging,
etc.).

PSA GM Purchasing & Logistic Committee 13

 EXTERNAL LOGISTICS
(Example)
Logistic Protocol

PSA GM Purchasing & Logistic Committee 14

 EXTERNAL LOGISTICS
Service Rate

• Organization shall establish and monitor service rates of Tiers

• Performance reviews should be conducted in order to:
• Identify key critical Tiers
• Identify the root causes
• Establish action plans and review status
Metrics Problem Solving Action Plan

Supplier Start Date: SQE

Location Rev. Date: SQE Phone & Fax #:
Duns Grad Date: Manager:
Commodity Program: Group:
Prepared by: Creativity Team:

G Green - Task Completed on Time

Y Yellow - Task May Be Late
R Red - Task is Late
W
White - Task Re-Timed, No Status
Blue - Task Status is Incorrect / Not Updated

PS
B
On Track (Bold Box/No Color)
TOTA L TOTAL STATUS
0 0 Most
Oldest Recent

TARGET ACTUAL
ACTION DATE LAST
ITEM Priority Group ACTION ITEM CLOSE CLOSE 1 2 3 4 5 6 COUNTER MEASURES
LEADER OPENED UPDATE
DATE DATE

1
2
3
4
5
6
7
8
9

PSA GM Purchasing & Logistic Committee 15

 EXTERNAL LOGISTICS
Auditor hints

During the audit check:

- Organization of the incoming (truck reception, unloading area, transfer to
incoming stock)
- Master schedule of deliveries (stability through weeks).
- Working instructions.
- An example of protocol with a tier X.
- Service rate metrics.
- Action Plans established for Key Critical Tiers
- An example of alert in case of deviation.
- Resources available matches incoming and outbound deliveries.

Global Purchasing and Supply Chain

PSA GM Purchasing & Logistic Committee 16

 EXTERNAL LOGISTICS
Protect production, what are we searching for ?

Item Requirement Criteria of Requirement

1) Components/materials which are risky to supply are identified and addressed to

daily supply operations/logistic meeting. Countermeasures and Corrective plans
are established and followed with Tier X.
2) Medium/Long Term securing plans for Key Critical Suppliers/Parts are
A process to secure supplies (incoming) is periodically reviewed by leadership.
ELG2 applied on a basis of risks analysis. 3) Safety Stock, advance warehouses are contractually defined and managed for the "far"
tier X (more than 48h of transportation) and when applicable for the "risky" tier X.
4)The management of the site is strongly involved and validates the whole process.

Criteria of Requirement
1 – page 18-21
2 – page 22
3 – page 22
4 – page 23
Auditor Hints – page 24

Prev. Requirement Next Requirement

PSA GM Purchasing & Logistic Committee 17

 EXTERNAL LOGISTICS

The criteria to define « risky supplies » must be clearly defined

Examples of criteria
• « far tier X supplier »: more than 48h of transportation , complex flow
(different transportation means, customs, …)
• Tier X supplier with bad service rate (several plant disruption in the
past,…)
• Tier X near from full capacity or with critical constraints
• Supplies which can be easily damage by transportation conditions
• …..

PSA GM Purchasing & Logistic Committee 18

 EXTERNAL LOGISTICS
Supply Chain Critical Meeting
In preparation for the Supply Chain Critical meeting, at the start of the day,
Departments shall identify their significant concerns from the past 24 hours which
include:
• Internal Concerns:
– Quality issues (internal or from suppliers) generating short fall
– Production program change (change in the mix, quantity, etc.)
– Inventory adjustment (lack of parts to cover the day)
– Downtime/Production Loss due to lack of material/components
• External Concerns:
– Days on hands (quantity of stock) below of the target
– Customs issues (for imported material) / roads closed
– Supplier issues (strike, bankruptcy, etc.)
– Historical Critical Suppliers (worst service rate, constraints, lack of
management, etc.)
All the significant issues are tracked on Critical Worksheet/Board.

PSA GM Purchasing & Logistic Committee 19

 EXTERNAL LOGISTICS
Supply Chain Critical Meeting - Structure
• The meeting is a logistic review meeting owned by Logistic/Supply Chain
Operations and supported by Quality, Manufacturing, Material Handling, and
support staff.
• Shall be held daily to review the significant supply concerns gathered by
Departments.
• At the meeting, leadership shall:
• Designate a leader (natural owner) for each concern/issue if one
has not been already assigned.
• Ensure proper support from all disciplines through attendance.
• Identify action required.
• Establish the next report out date for the issue if it is not closed.
• Each issue shall be documented on a board or equivalent. This form is reviewed
at the meeting to provide structure for the report out and to keep the meeting to
its allotted time frame.

PSA GM Purchasing & Logistic Committee 20

 EXTERNAL LOGISTICS
Supply Chain Critical – Worksheet/Board Control

Points to Review:
Ownership (Example)
Countermeasure
ABC Company - Supply Chain Critical Meeting Tracking Board
Overall Status R
1) Required but not initiated
2) Target Date Missed
Next Report Out Date Y Initiated but not complete
Complete
G
N/A Not Applicable

OVERALL STATUS
Part & Part Number

Actual Closed Date

Open > 30 Days=R

Next Report Date
Coverage (days)

Time to close
Date Opened

Department

By Owner
Customer
Supplier

Reason
ITEM #

Owner

(RYG)
Issue Description Status

04/15 - SQE working @ supplier process in order to fix it

High Quality 04/15 - Process fixed and good parts in transit
Nut Maurice 16/04
1 4/15/13 Welding XYZ GM 0.5 Lack of component rejection @ supplier 04/16 - Ok parts arrived @ plant 16-Apr 1 G
93345678 SQE
plant 04/16 - Level of stock achieved the target
04/16 - Issue solved

04/15 - DRE verifing the data bank

04/15 - Deviation opened in order to use the "wrong material
16/04
Raw Material Wrong Engineering John 04/16 - Supplier starts the production of the "right" material
2 4/15/13 Stamping FFE PSA 0.8 Lack of raw material 27/04 27-Apr 12 G
95777718 Release DRE (forecast to receive the material - 10 days)
04/27 - Right raw material received
04/27 - Issue solved
Material Marc 17/04 04/16 - Issue escalated to Department in charge of
3 4/16/2013 TTT Plastic pin GM 6 Material Blocked @ Customs Customs Strike Y
Flow MF Sup. importation/exportation

• Field “Status” in the Board: countermeasure plan (securing) shall be defined and
tracked in order to avoid Downtimes/Production Losses.

PSA GM Purchasing & Logistic Committee 21

 EXTERNAL LOGISTICS
Key Critical Suppliers/Parts – Medium/Long Term Securing Plan Review
• The meeting is a logistic review meeting owned by Logistic/Plant Manager and
supported by Purchasing, Program Management, Quality, Manufacturing,
Material Handling, and support staff.
• Shall be held at least in a monthly basis to review the long term securing plan
related to Key critical Suppliers/Parts.
• Inputs for this meeting:
• The issues that cannot be solved in the Supply Chain Critical Meeting
• Future Capacity issues (change in the customers demand that could affect
the capacity based on S&OP / MPS information)
• Trouble suppliers issues (Financial issues, Logistic issues, Quality issues, etc.)
• Safety stock strategy
• Stock levels adapted to customer demand
• When applicable, warehouse established and managed for suppliers
with high supply lead time and/or trouble suppliers

PSA GM Purchasing & Logistic Committee 22

 EXTERNAL LOGISTICS
Key Critical Suppliers/Parts - Long Term Securing Plan Review (Cont.)
• At the meeting leadership shall:
• Review the status of on going plans
• Ensure proper support from all disciplines through attendance
• Identify and eliminate Roadblocks

PSA GM Purchasing & Logistic Committee 23

 EXTERNAL LOGISTICS
Auditor hints

During the audit check:

- Identify a "risky" supply (ex: far supplier or failing supplier).
- Examine the securing plan associated.
- Emergency procedures with alternate supply process.
- In case of safety stocks, check tier1 strategy defined for that (contractual definition,
increased demand etc.)

Global Purchasing and Supply Chain

PSA GM Purchasing & Logistic Committee 24

 EXTERNAL LOGISTICS
Supply process (outgoing), what are we searching for ?

Criteria of Requirement
1 – page 26-27
2 – page 27
3 – page 28-29
4 – page 29-30
5 – page 31-41
6 – page 42
Auditor Hints – page 43

Prev. Requirement Next Requirement

PSA GM Purchasing & Logistic Committee 25

 EXTERNAL LOGISTICS
Shipping Process Management
• The Organization shall describe (in a procedure) all steps related to shipping
process and manage them in order to support the repetitive shipping and
delivery plan. Some examples of steps:
• Preparation
• Receive and Print Order
• Verify availibility of finished products
• Prepare correct material per schedule requirement
• Ensure shipments are properly labeled and palletized
• Stage material on truck dock ahead of window time
• Loading
• Allow Carrier driver access to dock for material verification
• Load material to the scheduled window time
• Communicate non-conformance issues to customer

Stock of
Manufacturing Finished Preparation Bogus Truck Loading Transportation
Products

PSA GM Purchasing & Logistic Committee 26

 EXTERNAL LOGISTICS
Standard Work – worksheet reference
(Example)
Task Tâche Std Durée
Standard Dur. Qui
Who 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00
Receivecommande
Réception Order PC W 601 10 Availability of finished products
Print Order
Impression commande PC W 602 10
Print Labels
Impression étiquettes PC W 603 10 Start of preparation
Pick pieces
Picking pièces PC W 604 120
Preparation
Operations
Label parts
Etiquettage PC W 605 30
Prepare
PréparationRack
palette PC W 606 10
Allocation
Cerclage PC W 607 10
Confirmation
Confirmation PC W 608 10 End of preparation

Safety
Temps time
de sécurité
PC W 609 240
Arrivée– camions
Truck Arrive PC W 610 15
Expedition
Contrôle Control PC W 611
expédition
Loading 10
Operations
Chargement
Truck – Load PC W 612 10
Truck – Departure
Départ camion PC W 613 10 Truck loading completed
(ASN / AVIEXP)
Milestones
PSA GM Purchasing & Logistic Committee 27
 EXTERNAL LOGISTICS
Shipping Process Management: Visual Management
• Dock Boards are: Visual, Simple, and Manual
• All parts are delivered at scheduled window times
• Deliveries to the plant are level hour-to-hour, day-to-day
• Non-conformances are tracked for problem resolution

Dock Status Dock 2

MON. - 8:00 am

Transportation Dock Board

MON. - 9:00 am
#1
#2
#3 x MON. -10:00 am
#4 x

MON. - 11:00am
Board Intent;
Status for current & past performance
• Early warning of shortages, late inbounds, & expedites MON. - 12:00 pm

PSA GM Purchasing & Logistic Committee 28

 EXTERNAL LOGISTICS
Shipping Process Management: Visual Management
• One unique board in the shipping area
• In case of NOK Status escalation process shall (Example)
be followed.

Product + Customer

End of preparation scheduled time

Truck departure time & date

Preparation status
G: on time / O: late / R: Emergency

Quantity

Bogus Truck Location

Previous day situation

PSA GM Purchasing & Logistic Committee 29
 EXTERNAL LOGISTICS
Bogus truck (Staging Area): Visual Management
• Area identified with footprint
• Best Practice: One are = one truck

Preparation Totem

Preparation
List

Defined area

Customer
& Product

Timing

PSA GM Purchasing & Logistic Committee 30

 EXTERNAL LOGISTICS
Labeling Process
• The labeling process shall be defined in a standard work
• The labeling process shall be assessed through layered audit or specific label
error proofing checklist
• When applicable, label error proofing strategy must be applied in order to
prevent mislabeling issues

(Example)
Name________________________________________________________________________________________________
Location________________________________________________________________Date__________________________
LABEL ERROR PROOFING ASSESSMENT - MANUFACTURING

Always (Yes)
Sometimes

Frequently
Never (No)
Directions: Answer each question by checking the column that applies.
PARTS WITHOUT LABELS
1 Do you have partial containers of finished goods?
2 Is there more than one partial container of finished goods for a part/number?
3 Are partial containers clearly, consistently and correctly identified as "partials"?
4 Are partial containers of finished goods kept in a designated, segregated area?
5 Do the operators follow a written process for re-introducing partial containers?
6 Do you repack parts?
7 Is there more than one part number in the repack/sorting area at the same time?
8 Is non-conforming material placed in a clearly, consistently and correctly identified container?

PSA GM Purchasing & Logistic Committee 31

 EXTERNAL LOGISTICS
Total Quality is the key to our survival

The design is right.

The raw materials meet spec.

The manufacturing process is capable.

The part quality is excellent.

Why can’t they get the

right label on the box?

PSA GM Purchasing & Logistic Committee 32

 EXTERNAL LOGISTICS
Assembly Plant Disruption

Typical Assembly Plant

Lean Demands
1 Vehicle Built Per Minute
Smaller Containers
1,000 Vehicles Built Per Day
Less Inventory
3,000 Part Numbers Per Vehicle

50 Parts Per Container

60,000 Containers Per Day

Smaller Containers = More Labels / More Opportunities for Errors

Less Inventory = More Disruption When Parts Are Wrong

PSA GM Purchasing & Logistic Committee 33

 EXTERNAL LOGISTICS
Effect of Mislabeling to a Customer Assembly Plant
• Impact direct run rate at the Customer assembly plants
• Deteriorate vehicle quality
• Cause warranty and customer dissatisfaction
• Create frustration due to repeat problems
• Incur significant costs due to retrofit, rework, logistics

Mislabeling represents
one of the biggest
supplier impacts on
QUALITY

PSA GM Purchasing & Logistic Committee 34

 EXTERNAL LOGISTICS
What is Mislabeling

PARTS AND LABEL DO NOT MATCH

• Wrong part number • Wrong destination • Wrong sequence

• Wrong hand • Wrong engineering Level • Incorrect quantity

• Wrong color • Unreadable bar code • Mixed containers on

pallet
• Mixed parts • Missing label
• Wrong part
• Partial container identification
• Foreign parts

PSA GM Purchasing & Logistic Committee 35

 EXTERNAL LOGISTICS
Probable Causes of Mislabeling
• Parts Without Labels
• Labels Without Parts
• Informal Changeover
• Dependent Labels
• Lack Of Error Proofing
• Lack of Documented Labeling Process / Training /
Communication
• Lack Of Workplace Organization

PSA GM Purchasing & Logistic Committee 36

 EXTERNAL LOGISTICS

Parts Without Labels Labels Without Parts

1234567890
654321
xxxxxxxx
ZZZZZZZZ
12345678
ZZZZZZZZ

1234567890
654321
xxxxxxxx
ZZZZZZZZ
12345678
ZZZZZZZZ

• Partial Containers
• Old Labels on Returnable
• Unlabeled/Poorly Labeled Finished Containers
Goods
• Pre-printed Labels in “Office”
• Unlabeled/Poorly Labeled Scrap
• Pre-printed Labels at Workstation
• Unlabeled/Poorly Labeled WIP
• No Control of Pre-Printed Labels
• Unidentified Repair
• Labels Fall Off Containers
• Repack
• Containers Labeled Ahead
• Engineering Samples
• Quality Dots Labeled Ahead
• Parts in the Office Area

PSA GM Purchasing & Logistic Committee 37

 EXTERNAL LOGISTICS
Lack of Error Proofing

First Manufacturing Step

Last Manufacturing Step

No Error Proofing

Apply Label (Less than 3 seconds)

No Error Detection

Customer Assembly Plant

detects defect and issues PRR

PSA GM Purchasing & Logistic Committee 38

 EXTERNAL LOGISTICS
Assembly Component Verification
Component Parts Final assembly is built using
Scanned: scanned sub-assemblies
- Correct value
- Correct quantity Barcode on subassembly for:
- unique identification
- count
- assembly status

Part Identification Label

123456789

Each bar coded part is scanned as it is

packed. When the correct quantity is
reached the shipping label is printed
and applied

Container shipping
label is applied
upon printing

PSA GM Purchasing & Logistic Committee 39

39
 EXTERNAL LOGISTICS
Process Flow, PFMEA and Process Control
PFMEA
POTENTIAL FMEA Number________________________________
FAILURE MODE AND EFFECTS ANALYSIS Page ___________________of___________________
(PROCESS FMEA)

PROCESS FLOW DIAGRAM

Item_________________________________ Process Responsibility________________ Prepared by_________________________________________

Model Year(s)/Vehicle(s)________________ Key Date___________________________ FMEA Date (Orig)_____________Rev____________________

Part Number___________________________ Core Team________________________________________________________________________________________________________________________

C Potential O D
Action Results
Process Potential Potential S Current e R Responsibility S O D R

Part Description_________________________
l Cause(s)/ c Recom m ended Actions
t
Function / Failure Effect(s) of e a c Process P & Target e c e P
s
M echanism (s) u
e Action(s) Taken
Requirem ent M ode Failure v Controls c N Com pletion Date v c t N
s of Failure r t

Operation
1
Description KPC KCC 2
1 3
2
3

PROCESS CONTROL PLAN

Prototype Pre-launch Production
Part Number__________Part Description__________
 Labeling should be included in flow Part/
Process Operation Machine
Number Description Device Characteristics Methods Reaction Plan
diagram, PFMEA and control plan
 Parts are considered as 100%
defective if labeling is incorrect 1

 The labeling step must be 2

considered as critical as a KPC 3

PSA GM Purchasing & Logistic Committee 40

 EXTERNAL LOGISTICS
Label ETI9 – GALIA Standard (example)

PSA GM Purchasing & Logistic Committee 41

 EXTERNAL LOGISTICS
Synchronous / Just In Time Flows
End of
production line

Pipeline Finished Tranportation Incoming products

Supplier products Customer
Sequencing
verification BUFFER
• The Sequence of finished products is verified by error proofing systems
• The size of the buffer is followed in real time (electronic dashboard)
• An escalation process is defined
• Buffer « jam »: stop production
BUFFER • Buffer is almost full: nominal situation
• Buffer is low. No impact on customer: increased production
SIZE
• Buffer is critically low. Impact on customer: increased
production & emergency transportation. Alert the
customer.
PSA GM Purchasing & Logistic Committee 42
 EXTERNAL LOGISTICS
Auditor hints

During the audit check:

- Shipping management board.
- Verify that the shipping process includes at least the following milestone:
- verification of finished products availability
- start of preparation
- end of preparation. Ready to ship
- truck loading completed (EDI message sent to customer)
- Identification of deviations on the board (late supply…).
- Organization of bogus truck areas.
- Preparation lists.
- Labels correctly fulfilled (with the right routing code).
- Equipment and work instructions to check the product and pallet labeling.
- Check hooping of the pallets (e.g.: safety aspect: metallic one can be danger for
operators)
- Verify that the AVIEXP message sent when truck loading is completed.

PSA GM Purchasing & Logistic Committee 43

 EXTERNAL LOGISTICS
Communication, what are we searching for ?

Criteria of Requirement
1 – page 45-47
2 – page 47
3 – page 47
4 – page 13-14
5 – page 13-14
Auditor Hints – page 48

Prev. Requirement Next Requirement

PSA GM Purchasing & Logistic Committee 44

 EXTERNAL LOGISTICS
Electronic Data Interchange (EDI)
• EDI: standardized communication link between supplier & customer
• Supplier MRP  Customer MRP

Without EDI

Manual Operations
Manual Operations

Customer With EDI Supplier

Forecast
Orders
Notice of shipment
Invoice
ERP / MRP ERP / MRP

PSA GM Purchasing & Logistic Committee 45

 EXTERNAL LOGISTICS
Electronic Data Interchange (EDI): Benefits
• Improves Quality
• Improves Supplier Performance (GSC Rating)
• Prevents Problem Report/Resolution (PRRs) for the supplier
• Provides Accurate and Timely Communication
• Provides Industry Standard Communication Tool
• Reduces errors by manual input
• Decreases Cost
• Can Eliminate Data Entry (Electronic Interface)
• Reduces Cycle Time
• Eliminates Mail Time (There Is No Mail)
• Streamlines Organization - Entire Supply Chain

PSA GM Purchasing & Logistic Committee 46

 EXTERNAL LOGISTICS
Electronic Data Interchange (EDI): Validation, Resource and Backup
• Organization shall have the EDI installed and validated with Customer
• Qualified people must be permanently available to handle with EDI in all shifts
• In case of issues with EDI, a back up solution shall be established and validated by
Customer. This back up shall be tested periodically in order to assure it is working
properly
• Example of back up: email, fax, etc.
• Any upgrade of EDI communications must be considered as significant change –
refer Managing Change

Notes (for GM Suppliers only):

• Requirements related to System Installation and Validation or issues with EDI:
organizations shall contact the COVISINT or GM supply chain focal point.

PSA GM Purchasing & Logistic Committee 47

 EXTERNAL LOGISTICS
Auditor hints

During the audit check:

- Training records for EDI training.
- Several Logistic Protocols and verify their status.
- Coherence between different Logistic Protocols and shipping schedules.
- Verify back-up solutions for EDI system failed.
- Customer site contact list .

PSA GM Purchasing & Logistic Committee 48

 EXTERNAL LOGISTICS
Effectiveness, what are we searching for ?

Criteria of Requirement
1 – page 50-51
2 – page 51
3 – page 52-53

Prev. Requirement What goes wrong ?

PSA GM Purchasing & Logistic Committee 49

 EXTERNAL LOGISTICS
Fill Rate
𝑾𝒆𝒊𝒈𝒉𝒕 𝒐𝒇 𝒕𝒉𝒆 𝒅𝒆𝒍𝒊𝒗𝒆𝒓𝒆𝒅 𝒎𝒂𝒕𝒆𝒓𝒊𝒂𝒍
Fill Rate(%) = x 100
𝑻𝒓𝒖𝒄𝒌 𝒎𝒂𝒙𝒊𝒎𝒖𝒎 𝒍𝒐𝒂𝒅

Fill Rate (Cube Util.%) by Route

80
70
60
50 Plan
40 Route 1
30 Route 2
Route 3
20
10
0
Jan Feb Mar Apr …. Dec

PSA GM Purchasing & Logistic Committee 50

 EXTERNAL LOGISTICS
Service Rate
𝑵𝒃 𝒐𝒇 𝒏𝒐𝒏 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒕 𝒐𝒓𝒅𝒆𝒓𝒔
Service Rate(%) = 𝑵𝒃 𝒐𝒇 𝒐𝒓𝒅𝒆𝒓𝒔 𝒐𝒗𝒆𝒓 𝒕𝒉𝒆 𝒑𝒆𝒓𝒊𝒐𝒅 x 100

• Service Rate can be used:

- Upstream with Tier X supplier
- Downstream with OEM Customer

PSA GM Purchasing & Logistic Committee 51

 EXTERNAL LOGISTICS
Stock level
• Examples of storage management indicators (safety stock)

Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12
Nominal level (Nb
parts) 3000 3000 3000 3000 3000 3000 3000 6000 6000 6000 6000 6000
Real level (Nb Parts) 2500 2600 2730 2900 2990 3200 3400 3950 4700 4950 5100 5200
Stock
Level Real level (%) 83% 87% 91% 97% 100% 107% 113% 66% 78% 83% 85% 87%
Target mini 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Target maxi 105% 105% 105% 105% 105% 105% 105% 105% 105% 105% 105% 105%
New customer
120% organization
1 shift  2 shifts
110%

100%
Real level (%)
90%
Target mini

80% Target maxi

70%

60%
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12

PSA GM Purchasing & Logistic Committee 52

 EXTERNAL LOGISTICS
Stock Rotation
• Examples of storage management indicators

Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12
In (parts/day) 6000 5000 5000 5000 4000 4000 3500 0 3500 3700 3900 4000
Out (parts/day) 4750 4630 4450 4300 3900 3950 3930 4030 3970 3920 3870 3600
Stock Level (parts) 11450 11820 12370 13070 13170 13220 12790 8760 8290 8070 8100 8500
Rotation = Stock Level / Out
(days) 2,4 2,6 2,8 3,0 3,4 3,3 3,3 2,2 2,1 2,1 2,1 2,4
Target mini 2 2 2 2 2 2 2 2 2 2 2 2
Target maxi 3 3 3 3 3 3 3 3 3 3 3 3

4
Stock Rotation – Part number xxxxxx
3,5
Rotation = Stock
3
Level / Out
2,5 (days)
Days

2
Target mini
1,5

0,5 Target maxi

0
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12

PSA GM Purchasing & Logistic Committee 53

 EXTERNAL LOGISTICS
What goes wrong ?
ELG1-ELG2 : Supply process
• Activity is not levelled (peak of activity in the morning…)
• Activity not synchronized with manufacturing: Lots of line stockout
• Trucks are waiting to unload
• Reception area is not organized: pallets and forklifts everywhere
• Problems of safety in the reception area (crossflows, lot of people)
• People feeding the line work directly in reception area

Global Purchasing and Supply Chain

PSA GM Purchasing & Logistic Committee 54

 EXTERNAL LOGISTICS
What goes wrong ?
ELG3-ELG4 : Shipping process
• Low customer service rate
• Activity is not synchronized with manufacturing (parts reference missing in
the finished product stock)
• Activity not levelled, activity is managed by emergency
• Lots of premium transportation
• Trucks are waiting to load
• The area is not organized, risk of mixing the pallets between customers
• Problem of safety
• Palletizing operations are not done according to customer requirements
• Parts are damaged during shipping process (bad palletizing, bad handling
conditions…)
Global Purchasing and Supply Chain

PSA GM Purchasing & Logistic Committee 55